WEST PALM BEACH, FL (www.hedgeco.net) – Tony Morrongiello, a long time hedge fund manager for Caliburn Capital Partners said,� That fixed fees for hedge fund managers may be unhealthy for the growingindustry by robbing fund operators of performance incentives.� According to reports, Mr. Morrongiello is in the process of launching a new hedge fund firm, which would be devoted to institutionalinvestors. He further said,� That recent hedge fund closures such as the Bailey Coates few days ago might actually be a lesson for the rest of the hedge fund industry.�
Morrongiello, said “We need to remind ourselves that we want to pay our hedge funds for performance.” Bailey Coates said it was closing its Cromwell fund; reports said the fund had lost about 20 percent of its trading assets recently. The fund manages about $1.1 billion at its peak, and assessing 20 percent performance fee and 2 percent management fee would normally net about $22 million a year, which would be split between the few partners of the fund.
Morrongiello said “That’s an unhealthy mix.� His new fund would be opening its doors to mostly institutional investors during the first quarter of 2006. The fund is also targeting other institutional investors such as pension funds, endowments, and insurance establishments. Morrongiello also believes that, “The new, long way will over the next 10 years sweep the asset management industry.” According to him the longer institutional investors get exposed to hedge funds, the likely they will allocate additional assets to such vehicles.
He also explained that, “There are a lot of insurance companies and pension funds that are already looking into the second stage of investment and he believes that Asian countries such as Japan will offer a big opportunity to hedge funds in the coming years.�
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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