(Opalesque) The Alignment of Interests Association, a non-profit investor-driven organization, has released Hedge Fund Fees: Achieving Greater LP/GP Economic Alignment, a set of guidance aimed at creating increased investor-manager alignment on the issue.
AOI’s Hedge Fund Fees guidance was developed by a committee comprised of leading institutional investors in hedge funds, including pensions, foundations and endowments, and consultants for investors in the space. The organization said AOI’s members continue to see merit in investing in hedge funds, but not without more significant changes to the traditional fee model than simply a discounted rate.
The paper is a result of many AOI meetings in which investor-to-investor idea sharing has contributed to better alignment between managers and investors. It is the only paper on the subject that has been published solely from the investors’ point of view, by investors. It does not seek to be prescriptive, but to provide considerations on various structures by providing examples and guidance on what has been working for both sides.
