MarketWatch – When SAC Capital Advisors, a top-performing hedge fund run by Steven Cohen, started raising money for a new fund in December, many investors rushed to get in.
That’s despite an annual management fee of 3%, a performance fee of 35% and a requirement that clients agree to have their money locked up for three years, according to two hedge fund investors who declined to be identified.
The new fund’s performance fee is about twice the industry average, suggesting such charges remain stubbornly high as investors clamor for access to the best managers. Compared to mutual funds, the fees are huge: the typical U.S. equity mutual fund charges no performance fee and a management fee of about 1.5%.
The new SAC Multi-Strategy Fund, with a minimum investment of $25 million, has so far raised about $2.5 billion from about 50 investors and will likely pull in about $3 billion, the investors added. SAC Capital declined to comment.
