The news that some hedge funds are discounting fees in order to attract assets is worrisome to me. Investors who are investing in funds, based on the fees a manager charges, is even more worrisome. I don’t understand this logic.
Investment decisions should be based on how a manager manages money. How he or she executes their investment strategy and their ability to put up numbers – not on how much or little is charged. Investing in a hedge fund or anything for that matter, is not like buying a car a newtelevision set – haggling and discounting should not be part of the equation.
A word to the wise: be weary of managers who drop their fees in order to attract assets – it can only me one thing – that they have become asset gatherers rather then asset managers…