The deflating effects of underperformance and overregulation
Warren Buffet’s wager with Protégé Partners epitomizes the gloom hovering over the hedge fund industry. In 2008, the Oracle of Omaha bet the New York-based fund-of-funds $1 million that index funds would outperform hedge funds over the next 10 years.
Greater transparency and lost perquisites may be unavoidable
Thanks to Mitt Romney and the Carlyle 3, the multi-trillion dollar private equity fund industry is now in the regulatory cross-hairs, and increased public scrutiny, coupled with the current drumbeat of adverse publicity, could easily result in PE fund managers having to provide greater transparency about their portfolio investments and, possibly, give up some of their prized perquisites.
If you are thinking about forming a UCITS fund in the EU, it may interest you to know that EU distribution platforms expect to be paid a minimum fee equal to 50% of your management fee for allowing retail shares of your funds to be made available to their so-called sub-distributors.