Those conventional hedge fund fees of the past, 2% of assets under management and 20% to 25% of profits generated, are being trimmed down. It’s getting tougher for hedge funds to find as many clients as before. Many are taking smaller-size amounts for investments.
But considering the recent financial meltdown, I still say hedge fund fees have been more stable than you would have expected them to be, a mere six to eight months ago.
Some hedge funds will continue to make big money. But they will be a decided minority, compared to the past. Money over the shorter term will be made from aberrations in the economy, not corporate earnings growth.
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