Long Slide in Hedge-Fund Fees Leaves the ‘2 and 20’ Model on the Ropes
- Average management fee globally slipped to 1.2% in first half
- Performance fees overall are at about 14.5%, Eurekahedge says
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Hedge-fund performance may be looking up this year, but the fees they command from investors are dwindling under pressure from less costly asset managers.
The average management fee charged by new hedge funds globally in the first half of this year slipped to 1.2% from 1.6% in 2007, before the financial crisis battered the industry, according to a report from Eurekahedge. Fees linked to performance fell to about 14.5%, leaving funds overall well below the “two and 20” fee model once considered standard.