Please see the attached Research Report for more information on the latest trends on the terms and conditions of management and performance fees for hedge funds. Report is based upon an extensive survey carried out in April - June 2009 involving both single manager fund managers and funds of funds, across a wide variety of strategies, global regions and total AUM.
Key points include:- Mean management fee currently stands at 1.63% and mean performance fee is 17.21%
- However 7 in 10 hedge funds still maintain a performance fee of 20%, demonstrating that investors are still willing to reward the alpha generated by top hedge fund managers.
- Distressed debt/event driven/special situation funds are commanding the highest fees
- Whereas market neutral strategies/multi-strategy/fixed income arbitrage funds have on average the lowest fees.
- European funds are charging, on average, higher fees than their US counterparts.
To download the full report click here.
Comment:
“It is clear that the idea of the ‘2 and 20’ structure as the industry standard is becoming outdated. Fees which for years have conformed to the industry standard of ‘2 and 20’ are now being driven down as investors become more powerful in the manager/client relationship. US pension funds such as CalPERS and Utah Retirement System have been vocal in their belief that the hedge fund remittance structure needs to evolve and managers in response to these demands and those of other institutional investors are changing their fee structures. The troubles the industry faced last year has resulted in a significantly smaller universe of hedge funds, and those funds which are flexible in the terms they can offer their investors are the ones which are picking up the new investment now assets are flowing back into hedge funds”
Amy Bensted – Manager, Hedge Fund Products
