Fund Performance no Justification For Fees

Date: Tuesday, November 14, 2006
Author: HFN Daily Report

A lot of hedge funds have no right charging such high fees, Reuters said an industry cabal noted Tuesday.

Industry personnel at the Global Alternative Investment Management conference held in New York also said the bulk of the asset class has not outperformed the general market.

A hedge fund "proliferation" is getting paid "outrageous" money for at best mediocre performance, attendee and Investure President Alice Handy said.

A 2% management fee and a performance fee of 20% is standard for the asset class.

The hedge fund industry has returned 8.95% this year compared with the 10.39% S&P 500 index return.

The influx of institutional money into the asset class has diluted performance, an attendee told Reuters.