Several Asia-based hedge funds are following in the fee-steps of global multi-strategy majors like Citadel and Millennium Management, by imposing additional charges on new clients to cover the escalating costs of attracting and retaining top talent, according to a report by Bloomberg.
The report cite people familiar with the matter as revealing that Nine Masts Capital Ltd recently adopted the so-called expense pass-through model, while Southern Ridges Capital Pte did so last year. Pinpoint Asset Management Ltd, meanwhile, has created three new share classes using the structure, according to Bloomberg’s sources.
The adoption of the model means higher investor fees than traditional performance and management charges, despite many Asia hedge funds posting weak returns. The report cites data from Eurekahedge as revealing that regional funds are down another 1.8% this year, on the back of an 8.8% average decline last year, with global investors looking to cut their exposure to China amid amid ongoing political concerns and sluggish economic performance in the world’s second largest economy.
