Hedge Fund Reader : Barclays Global Investors on Hedge fund Managers

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June 20, 2006

Barclays Global Investors on Hedge fund Managers

Barclays Global Investors believe that hedge fund managers do not deserve their high fees more often. The statement is based on a recent research report prepared by the organization. Hedge funds do have some structural advantages. However, traditional investment firms also attract talented managers and provide their own set of advantages to institutional clients. BGI report says that the current hedge fund boom has not increased the overall supply of investment.

According to BGI, the high pay structure for hedge funds is based on the perception that it helps the hedge fund managers in attracting more investments. Hedge funds have always seen large asset inflows. The hedge fund industry witnessed an increase in the number of hedge funds and the flow of investment managers into hedge funds has also risen. BGI report reveals that there has been a significant rise in average hedge fund fees. The report also says that while hedge funds avoid constraints and have greater flexibility to invest in many non-traditional assets, they also fail more quickly than institutional funds.

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June 20, 2006 in Research | Permalink