Poor returns will likely force hedge funds to reexamine fee structures and could push many funds with assets under management of less that $100 million to go under, according to The Financial Times.
“The majority of people in the hedge fund industry believe two and 20 is not going to hold,” Alexander Ineichen, a member of the investor steering committee of the Alternative Investment Management Association, told The Financial Times, referring to the standard hedge fund fee model of a 2% flat fee and a 20% fee on returns. “The two will go to one, which was the original fee structure of hedge funds.”