9 January 2017

High Fees? Hedge Funds not the only suspects!

Many comments are made about high fees charged by Hedge Funds. But before you jump ship you should keep in mind that Private Equity or Traditional Funds are not necessarily cheaper. The Hedge Fund concept per se does not mean that the 2+20 fee structure is set in stone. It is a choice that the providers give the investor and you are free to shop around.
But Private Equity Funds are also charging a not inconsiderable management fee and take a cut from the fund's performance. And when you invest via a Private Bank or Financial Adviser you quite often are paying a fee to them as well as a fee for the underlying investment vehicles they allocate your investment monies to.
You need to take special care and advice when awarding a management mandate to any Wealth Manager and get a clear analysis of the impact of fees on future performance!

https://www.bloomberg.com/news/videos/2017-01-04/why-asia-s-richest-families-are-dumping-hedge-funds (Bloomberg)