Hedge fund manager Cliff Asness is the latest industry professional to slam the industry for the towering fees it charges investors.
Asness, the co-founder of quant fund AQR Capital, told Financial News that “managers like to charge fees as if it’s all alpha,” despite utilizing strategies that can be delivered at lower costs. Hedge funds typically charges investors the standard 2% management and 20% performances fees.
Asness also added that “most hedge fund strategies are more about very competent implementation and fair fees and terms, than they are about ‘genius.’”
At the World Economic Forum in Davos last month, hedge fund guru George Soros said that hedge funds can’t beat the market because the “2 and 20” compensation scheme is eating into profits, according to a Business Insider report.