Reuters UK – Hedge funds are going to have to dance to their investors’ tune once more as lucrative profits fall and a new breed of clients begins flexing its muscles, demanding more results from managers.

Institutional clients, a growing part of the hedge fund investor base, are questioning high fee levels and say they want to see what managers are really doing with their money — an understandable worry since the Madoff fraud.

They also want to know how hedge funds manage risk in choppy markets after record performance losses last year, and are balking at funds that are restricting investors from accessing their money by using so-called gates.

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