Marginal decline seen in hedge fund management and performance fees

Management and performance fees charged by hedge funds and fund of hedge funds are experiencing a downward trend. This could spell the end of ‘2 and 20’ and ‘1 and 10’.

Although hedge funds are still counting the costs of 2008, fee structures have been less affected than many expected.

The industry norm of 2% management and 20% performance fee – the two and 20 model – has subtly shifted. This is also the case with the standard one and 10 model used by funds of hedge funds (FoHF).

While many acknowledge fees are declining slightly, at the same time many funds are sticking with the standard fee structures. A 2010 survey by Credit Suisse on investor appetite and