Hedge fund managers accept that the fees they can charge for their services are likely to fall, according to a survey conducted by bfinance, a consultancy.
Until last year demand for hedge funds largely exceeded supply, allowing the typical fund to charge a 2 per cent flat fee and a 20 per cent performance fee, significantly greater than the charges levied by the vast majority of mutual funds.
However, after a dire year for the industry, with widespread losses prompting a wave of redemptions, fees are expected to come under unprecedented pressure. Hedge funds and funds of hedge funds surveyed by bfinance said they expected flat fees to fall to about 1 to 1.5 per cent, and performance fees to decline to 13 per cent.
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