WEST PALM BEACH, FL (www.hedgeco.net) – New released research shows a wide variation in the level of both management and performance fees assessed by hedge fund managers. According to the study doneby Fitzrovia, there is a need of \u00c3\u00af\u00c2\u00bf\u00c2\u00bdassessing hedge fund fees beyond simply referring to the much used “2 and 20” \u00c3\u00af\u00c2\u00bf\u00c2\u00bd both for their impact on returns and on fund company revenues.\u00c3\u00af\u00c2\u00bf\u00c2\u00bd Fitzrovia\u00c3\u00af\u00c2\u00bf\u00c2\u00bds studyalso shows that, \u00c3\u00af\u00c2\u00bf\u00c2\u00bdaround one third of alternative investment funds in the research charge a performance fee at a level other than 20% of net gains.\u00c3\u00af\u00c2\u00bf\u00c2\u00bd<\/p>\n
The study also showed that 18 percent of the firms included in the research apply the \u00c3\u00af\u00c2\u00bf\u00c2\u00bdhurdle rate\u00c3\u00af\u00c2\u00bf\u00c2\u00bd provision. Such provision means that performance fees may only be charged only when the manager exceeds the previous \u00c3\u00af\u00c2\u00bf\u00c2\u00bdrisk-free level of the return.\u00c3\u00af\u00c2\u00bf\u00c2\u00bd The new data also showed that about 87 percent of the funds in the study use the \u00c3\u00af\u00c2\u00bf\u00c2\u00bdHigh Water Mark\u00c3\u00af\u00c2\u00bf\u00c2\u00bd provision. The High Water Mark provision ensures that hedge fund managers may only assess performance fees when they post returns above the previous threshold or level already attained.<\/p>\n
However the study shows that only two percent of the managers reset the High Water Mark provision, after a defined period of time. According to Fitzrovia, both managers and investors would benefit from resetting the \u00c3\u00af\u00c2\u00bf\u00c2\u00bdHigh Water Mark\u00c3\u00af\u00c2\u00bf\u00c2\u00bd provision.<\/p>\n
The Fitzrovia\u00c3\u00af\u00c2\u00bf\u00c2\u00bds report is entitled \u00c3\u00af\u00c2\u00bf\u00c2\u00bdBenchmarking Performance Fees\u00c3\u00af\u00c2\u00bf\u00c2\u00bd; the study analyzed the performance fee structures of 2,422 funds, including 393 alternative investment funds.<\/p>\n
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net<\/p>\n
HedgeCo.Net is the most popular hedge fund database and community in the world. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!<\/p>\n
Be sure to check out our sister sites. www.hedgefundlounge.com<\/a>, www.hedgefundtools.com,<\/a><\/strong> and www.hedgefundemployment.com.<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":" WEST PALM BEACH, FL (www.hedgeco.net) – New released research shows a wide variation in the level of both management and performance fees assessed by hedge fund managers. According to the study doneby Fitzrovia, there is a need of \u00c3\u00af\u00c2\u00bf\u00c2\u00bdassessing hedge […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2944","post","type-post","status-publish","format-standard","hentry","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/2944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=2944"}],"version-history":[{"count":0,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/2944\/revisions"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=2944"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=2944"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=2944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}