Comments on: Annus horribilis for hedge funds illustrates benefits of performance-based fees http://allaboutalpha.com/blog/2008/09/25/annus-horribilis-for-hedge-funds-illustrates-benefits-of-performance-based-fees/ Hedge funds, portable alpha, 130/30 and alpha-centric investing Fri, 19 Mar 2010 07:52:26 +0000 http://wordpress.org/?v=abc hourly 1 By: Shelly Jacobs http://allaboutalpha.com/blog/2008/09/25/annus-horribilis-for-hedge-funds-illustrates-benefits-of-performance-based-fees/comment-page-1/#comment-137978 Shelly Jacobs Wed, 08 Oct 2008 21:16:02 +0000 http://allaboutalpha.com/blog/?p=3440#comment-137978 Bravo! As many managers are merely asset gathers, with little to no performance concerns, just in business as a depository in order to gather the management fees, and depending upon typical investor inertia to withdraw. Let's applaud the hedge fund managers who at least try to earn excess Alpha for their investor clients. Bravo! As many managers are merely asset gathers, with little to no performance concerns, just in business as a depository in order to gather the management fees, and depending upon typical investor inertia to withdraw.

Let’s applaud the hedge fund managers who at least try to earn excess Alpha for their investor clients.

]]> By: tom brakke http://allaboutalpha.com/blog/2008/09/25/annus-horribilis-for-hedge-funds-illustrates-benefits-of-performance-based-fees/comment-page-1/#comment-135912 tom brakke Fri, 26 Sep 2008 13:07:33 +0000 http://allaboutalpha.com/blog/?p=3440#comment-135912 I tackled this a few weeks ago from another angle in my piece http://researchpuzzle.com/blog/2008/09/05/the-hedge-fund-dilemma/. While I got at least one comment from a reader who believed that I was saying that all hedge fund managers and incentive fee structures are bad, that was not my point at all. I think that there should be experimentation and innovation in the area of fee structures, just as there should be in all aspects of this dynamic business. I find it hard to believe that the basic fee structure that is used by funds large and small -- successful at adding real value and not -- should be universally embraced, especially when there are open questions about the behaviors that are incented in a variety of environments. I tackled this a few weeks ago from another angle in my piece http://researchpuzzle.com/blog/2008/09/05/the-hedge-fund-dilemma/.

While I got at least one comment from a reader who believed that I was saying that all hedge fund managers and incentive fee structures are bad, that was not my point at all. I think that there should be experimentation and innovation in the area of fee structures, just as there should be in all aspects of this dynamic business. I find it hard to believe that the basic fee structure that is used by funds large and small — successful at adding real value and not — should be universally embraced, especially when there are open questions about the behaviors that are incented in a variety of environments.

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