Hedge Fund fees are under pressure again. There’s a drumbeat from institutional investors demanding lower fees in light of lackluster performance. So what’s a manager to do? We provide some analysis and negotiating strategies.
It is well known that there is increasing pressure on CTA fees. We see this in the proliferation of smart beta products offered with relatively low fees. Institutions don’t want to pay for beta. Putting aside what beta means in the CTA world, let’s look at the options for CTA fee structure and how to negotiate.