Hedge Funds Turn to Co-Investment as Pressure Mounts on Fees
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Hedge funds are turning to co-investment deals with investors to boost returns as their traditional fund-management business come under increasing pressure from less costly alternatives.
About 18% of funds already offer co-investment to clients, and 10% are actively pursuing such deals, according to a survey from the Alternative Investment Management Association, a global industry group. Another 27% of funds said they’d consider this strategy, which allows investors to put money into deals alongside managers rather than directly into funds.