- Advertisement -

Related

Hedge funds becoming more flexible on fees

- Advertisement -

Stockholm (HedgeNordic) – According to a recent study by industry data provider Preqin, hedge fund managers view investor demand over fees as a key driver of change this year.

Preqin, which surveyed 276 hedge fund managers late last year for the poll, found that hedge fund managers are responding to high-profile redemptions and allocation changes with changes to fee structures. A full three-quarters of those polled are willing to reduce their fees, and many intend to spend more on marketing in the year ahead in an effort to counter broad investor skepticism about the value of investing in hedge funds.

According to Preqin, hedge fund fees are on a downward trend where average management fees dropped to 1.51% among funds incepted in 2016, down from 1.57% in 2014 and 2015. Ten percent of managers said they are prepared to reduce performance fees, 37% would reduce their management fees, and 27% are open to reducing both. In contrast, 26% of managers said they were not prepared to reduce their fees.

While 55% of institutional investors believe management fees improved over 2016, more than three-quarters (76%) believe that the area needs further improvement over 2017, the Preqin study suggests.

In a comment, Amy Bensted, Head of Hedge Fund Products for Preqin says:

“Investor dissatisfaction shows no signs of abating in early 2017, and it is clear that addressing investor pressure around performance and fees will be the key challenge for hedge fund managers in the year ahead. Managers will be looking to build on high returns to restore confidence in the asset class as a whole, revive investor sentiment and begin reversing the trend of outflows from hedge funds.”

Picture (c): shutterstock-Davi-Sales-Batista

 

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Jonathan Furelid
Jonathan Furelid
Jonathan Furelid is editor and hedge fund analyst at HedgeNordic. Having a background allocating institutional portfolios of systematic strategies at CTA-specialist RPM Risk & Portfolio Management, Mr. Furelid’s focus areas include sytematic macro and CTAs. Jonathan can be reached at: jonathan@hedgenordic.com

Latest Articles

Beyond 60/40: The Case for Liquid, Systematic Diversification

By Bjarne Graven Larsen: For decades during the great moderation, the 60/40 portfolio was the institutional investor's Swiss army knife. Equities grew wealth; bonds...

Aspect Capital’s Evolving Approach to Chinese Futures

Chinese futures in general add substantial diversification benefits to global futures - and the Chinese commodity futures that dominate certain Aspect Capital strategies also...

Systematic Merger Arbitrage in 2026: Why a Rules-based Approach Matters More Than Ever

By Scott Schefrin, Portfolio Manager at AB Hedge Fund Solutions: After a series of slower years for deal activity, merger arbitrage has re-emerged as a compelling strategy...

Not So Lazy Prices

By Liam Hynes, PhD – S&P Global Market Intelligence: Systematic investing has always been a story of expanding information sets. Prices, then fundamentals, then...

The Hidden Beta in LLM Recommendations

By Victor Brassart and Dan Edelstein at Hafnium: As LLMs become useful in coding, copywriting, and even mathematics, it is natural to ask whether...

Edge Hunting Across Eras

“I have always looked for an advantage or an edge in markets, and I still do,” says Peter Warren. Over more than four decades...

Allocator Interviews

In-Depth: Diversification

- Advertisement -

Voices

Request for Proposal

- Advertisement -