Buffett Says Hedge Funds Get ‘Unbelievable’ Fees for Bad Results - Bloomberg:
"Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said large investors should be frustrated with fees they’re paying hedge fund managers who fail to match the returns of index funds.
“There’s been far, far, far more money made by people in Wall Street through salesmanship abilities than through investment abilities,” Buffett said Saturday during Berkshire’s annual meeting in Omaha, Nebraska.
Hedge funds traditionally charge a management fee that’s 2 percent of assets, plus 20 percent on any profits. That’s “a compensation scheme that is unbelievable to me,” Buffett said. He added that some pension funds have disregarded his advice, and gone ahead and hired consultants."
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