The empowered investor – it pays to negotiate
As investors grow in sophistication, they are exhibiting greater interest across a range of products and offerings, in addition to the traditional emphasis on manager selection and investment strategy. Furthermore, the lines between active and passive management, and across alternatives products, continue to blur, and investors look to Hedge Funds, for example, to manage longer-lock products or a greater portion their long only investments.
Furthermore, the survey data suggest that investors have been able to negotiate more aspects of the terms governing the relationship with their hedge fund managers. They are seeing greater engagement form mangers in addressing both ‘traditional’ touch points, such as reduced fees for longer locks or larger tickets, as well as the ‘non-traditional’, such as hurdle rates or limits on pass-though expenses.