14 August 2009

Hedge Fund Managers gaming performance yardsticks

The improved markets have also put some wind into the sails of the hedge fund industry. Some high-profile managers that crashed out during the market turbulence of the past two years and closed their funds are trying to launch new funds. This activity needs to be carefully monitored as it is possible that the managers want to get around the problem posed by so-called 'high water marks' in their old funds. They would have prevented managers to charge performance fees until the fund values reach their previous high point.