by Chris Becker
If you thought being a fund manager for Australian superannuation was a cozy gig, with the highest fees in the world and performance that doesn’t even match the All Ordinaries, then maybe you should try being a hedge fund manager! The industry uses a standard “2 and 20” fee structure, that is an upfront fee of 2% and ongoing performance fee of 20%, plus are want to expense even private jets and other perks to their customers, as FT recently unveiled.
Not unlike their professional super brethren, the hedge fund industry as a whole does not provide much outperformance compared to a stock index or even a different volatility profile, as this correlation chart from Morgan Stanley shows: