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New hedge fund bucks trend with fees cut

Financial Times – One of the UK’s fastest-growing hedge funds is slashing its fees, in a move that it hopes will spark a rethink of the industry’s notoriously high charges.

The new Core Macro fund being set up by Cambridge-based Cantab Capital will employ similar trading strategies as funds from Man Group, Winton Capital and BlueCrest, three of the world’s biggest hedge funds that manage $100bn between them, but at half the cost to investors.

While the industry standard is an eye-watering “two and 20”, or 2 per cent of all capital invested annually and 20 per cent of all profits, Cantab’s new fund levies only 0.5 per cent and 10 per cent.

Fees are set to become one of the hedge fund industry’s biggest areas of change as large institutional investors try to use their clout to force discounts in a tough trading environment that has dented hedge funds’ once-high returns.

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