Investors want overhaul of fund fee structures, study finds

Half of managers charging performance fees expect they will become more difficult to earn, new research has found.

Half of asset managers plan to implement high water marks for performance fees, according to a global study of the financial industry by researchers Create. These fees force managers to make good all past losses before they can levy a performance fee again, typically 20% of new returns. They are popular among hedge funds, but have been less so among regulated absolute return portfolios. Create's report said: "The bear market of 2008 to 2009 showed that around 80% of asset managers had been paying themselves too much." The study also found investors increasingly want performance ...