Hedge fund investors are getting more demanding about charges
Other - FEBRUARY 20, 2024

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Hedge fund investors are getting more demanding about charges

by Andrea Zander

More hedge funds are agreeing to conditions on their performance fees, reflecting a tougher environment for attracting investors to riskier strategies, according to a Bloomberg article.

A survey by Barclays Plc found 67 percent of investors now prefer a hurdle rate, meaning the fund must perform a certain amount above a threshold before they can charge incentive fees.

And hedge funds appear to be obliging, with investors indicating hurdle rates were more available in 2023 compared to historically, according to around 310 asset allocators polled by Barclays.

Funds are facing questions about fees and expenses in a high-rate environment in which relatively low-risk products provide decent returns. Last year, the average hedge fund returned about 8 percent, according to data compiled by Bloomberg, while the risk-free rate was about 5 percent

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