Hedge Fund Fees Firm With Rebound as LBO Fees Bow to Pensions

Bloomberg – Larry Powell, deputy investment chief for the $16 billion Utah Retirement Systems, was convinced in January that hedge funds finally would buckle under the pressure of record losses in 2008 and lower their fees.

He figured it was appropriate to insist on a reduction in the standard industry charge of 2 percent of assets and 20 percent of gains on investments as low as $25 million, according to a memo Powell circulated with hedge funds and investors. Performance fees should be assessed only after a minimum return is exceeded and paid over several years rather than annually, he said.

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