24/7 Wall St. – The hedge fund industry sure seems and looks different now when compared to a decade or two ago. We recently wrote about how the 2% and 20% pricing strategy long imposed on hedge fund investors may soon have a day of reckoning as far as being the standard pricing. Hedge fund investors have become increasingly dissatisfied with high fees for substandard performance.
It appears that hedge funds also are using other methods to lower costs as they feel the pressure from investors on fees. Everything from outsourcing back office, compliance and legal, to cutting costs from trading by lowering commissions paid to Wall Street. One way they are attempting to lower costs and track the broader markets is by using the same exchange traded funds (ETFs) that retail investors are using.