21/02/2017
Billionaire hedge fund managers on the decline
p { margin-bottom: 0.25cm; line-height: 120%; } The billionaire hedge fund manager was a relatively new species whose population had increased sharply in recent years. This time of fat cattle may be coming to an end, the New York Times estimates. Last year, four billionaire hedge fund managers fell off the Forbes list of the 400 richest Americans: they are William A. Ackman at Pershing Square Capital Management; David Einhorn at Greenlight Capital; Marc Lasry at Avenue Capital Group, and Nelson Peltz at Trian Fund Mangement. The number of alternative billionaires present in the Forbes rankings has increased from 32 in 2015 to 28 in 2016, with cumulative wealth of USD162.5bn, compared with USD169bn in 2015. This developnent runs parallel to less dynamic sales for alternative managers, who liquidated 782 funds in the first nine months of 2016, according to statistics from HFR. The number of hedge fund creations has fallen in parallel, and the total number of hedge funds has fallen back beneath 10,000, to 9,925, according to HFR, after a peak at 10,142 in 2014. With poor or mediocre perfomance for the sector in the past few years, investors have called into question the fee structure applied by hedge funds, the famous “2/20” (2% annual management fees and 20% of performance above a speficied benchmark). Commissions averaged 1.49% in third quarter 2016, compared with 1.58% in 2010, according to HFR. Outperformance commissions averaged 17.5% in 2016, compared with 19.3% in 2008.
