LONDON (Reuters) – Investors are pushing hedge funds towards the use of relative rather than absolute measures of performance, which could create pressure on fees, hedge fund industry figures said.
Hedge funds, which can use tools such as derivatives and short-selling to help protect assets and make money when markets are falling, have tended to measure their performance in absolute or real returns.
In contrast, traditional fund managers tend to measure performance against benchmarks and against rival funds, though some are beginning to adopt absolute measures of performance.
However, speakers at the Reuters Hedge Funds and Private Equity Summit in London this week said there was investor pressure on hedge funds to look at benchmark measures of performance.
