Fee Demands Step Up Pressure on Hedge Managers

By Rachael Levy June 29, 2016

“Many negotiations are seeking better ways to match incentive fees with alpha creation, efforts that are often tailored for specific strategies,” says Chris Cutler, founder of Manager Analysis Services, an investment consultant.

“In particular, for distressed, structured and levered credit, and long-biased equity managers, too much of the incentive fee often gets paid as a result of underlying beta performance rather than on the alpha performance of a manager,” he says.