GLOBAL - Hedge fund managers have stepped up to defend the fees they charge pension funds.
It came after Wilshire Associates managing director and senior consultant, Michael Schlachter, criticised high hedge fund fees.
“I think hedge fund fees are absurdly high but they have gotten where they are because clients are willing to pay them. The minute clients stop being willing to pay these absurdly high fees, these fees will come down to more rational levels,” said Schlachter.
However, hedge fund managers said fees were justifiable because returns were so high.
Andrew Lodge, managing director of Nedgroup Investments , which offers institutional investors a range of fund of funds investments, said: “The manager needs to earn money but it should be aligned with performance, this means they need to show they are producing good returns.”
Lodge said high fees are justified through high operational costs, added value and specialist expertise that pension funds do not have.
“Hedge funds are more ethical than long-only investing as funds close when they have enough money - you never get long-only funds closing to new assets,” said Lodge.
Philippe Bonnefoy, principal of Cedar Partners which provides hedge fund of funds investments, said: “If hedge funds offered little value the fees would not be so high. If managers are not performing they should not be charging high fees”.
“The best managers need to be judged on net return to investor, not on fees,” added Bonnefoy.
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.