Hedge fund investors are no longer content to pay high fees for mediocre performance. Recently, ExodusPoint Capital, a firm managing $11 billion, made headlines by introducing a “cash hurdle” – waiving performance fees unless their returns surpass the yield on short-term Treasury bills (around 5%). This move comes after growing pressure from investors, frustrated with underperformance and eager to see fees better aligned with results. đź“Š
Historically, hedge funds charged hefty fees—often 2% of assets and 20% of profits—regardless of whether they beat market benchmarks. But with alternatives like high-yield savings accounts and low-risk bonds offering competitive returns, investors now have more leverage to demand better terms. 🚀
This shift marks a potential turning point in the hedge fund world, as investors push for transparency and better value. Could this be the start of a new trend in how hedge funds operate?
