Do Incentive Fees Signal Skill?

Yeah….no…..maybe….ah…apparently not…. We examine the relation between incentive fees and hedge fund performance. In an industry where information asymmetries (and the consequent risk of agency problems) are severe, the efficacy of such outcomes-based contracting to align investor and manager interests is of fundamental importance to investors. Consistent with theory, we find that the higher a hedge fund’s incentive…

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What Is A Hedge Fund?

They forgot to mention – a massive wealth transference device where the proprietors of the fund get rich whilst the fund stakeholders get a return less than they could have got by simply buying an index fund. Did I miss anything out?     What is a Hedge Fund Infographic from HedgeFundFundamentals

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