Goldman cuts hedge fund fee [Inv. News]
By Darla Mercado
August 15, 2007
In an attempt to lure new investors in a period of hedge fund flops and roiling market activity, Goldman Sachs Group Inc. has slashed fees for its Global Equity Opportunities hedge fund, according to Bloomberg.
Stock market losses sucked out $1.4 billion of the fund’s assets this month, leading to investors and the firm adding $3 billion into the fund earlier this week.
Now that the deadline for investors to exit hedge funds by the third quarter is here, Goldman Sachs will eliminate the 2% management fee and slash its performance fee in half to reel in new participants, a source told Bloomberg.
In order to retain current participants, the New York-based firm is also providing the same terms to existing investors on any cash they invest by Aug. 17.
Until the recent round of hedge fund flops amid roiling market activity, Global Equity participants were paying the standard two-and-20, two percent of assets for a management fee, and 20% of profits as an incentive fee.
However, under the new arrangement, investors won’t pay incentive fees until the fund appreciates by 10%, Bloomberg reported. |
