Hedge fund managers, some of the City’s highest paid traders, face slashed performance fees as the sector loses money and investors, a leading academic said yesterday.
Narayan Naik, the director of the London Business School’s Hedge Fund Centre, said overcrowding was putting increasing “downward pressure” on the fees and new funds entering the market would find it particularly difficult to raise them.
“There are too many managers chasing too few opportunities using very similar modelling techniques,” he said. “Some funds will offer lower fees to ensure their after-fee return is higher.
