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Fees Trending Lower

Report: Systematic Strategies

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Stockholm (HedgeNordic) – Hedge fund fees have been trending lower in the past several years, and 2019 was no exception. According to data from Eurekahedge, the hedge funds launched last year are charging investors an average performance fee of 13.4 percent, compared with an average fee of 15.0 percent charged by the hedge funds launched in 2018.

Performance fees decreased year-over-year across most of the world. The average performance fee charged by North American hedge funds launched last year equals 14.8 percent, down from the 16.3 percent charged by funds started in 2018. Performance fees for European hedge funds declined to 12.6 percent from 14.3 percent in 2018. The average management fee for the hedge funds launched last year was 1.16 percent. The funds launched during 2018, meanwhile, charge an average management fee of 1.24 percent.

According to Eurekahedge, “barring certain outliers, the industry has witnessed a trend of fee decline over the last decade as growing competition from other alternative investment vehicles and consistent single-digit yearly returns post-financial crisis have drawn investors’ scrutiny, raising questions whether average hedge fund managers deserve their fees.”

 

Image by Gerd Altmann from Pixabay

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Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

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