Performance fees research conducted by Eller College of Management Assistant Professor of Finance, Andrea Rossi, was recently referenced in an article in the German magazine, Institutional Money.
The article looks at fee structures for hedge fund investors as well as why hedge fund managers currently walk away with more fees than before, concluding that while the basic fee of hedge funds is decreasing, the effective performance fee is increasing.
“Performance fees are supposed to align the interests of hedge funds and their investors. This may sound plausible in theory, but in practice it actually leads to much higher fees,” the article states, quoting Rossi. “The lion’s share of the profits made from investor capital goes to hedge fund managers.”
Andrea Rossi joined the Eller College of Management in 2018 after earning his PhD in Finance from Ohio State University. A Chartered Financial Analyst, his areas of expertise include private equity, asset management, investor behavior and corporate insiders. He has also worked as a financial analyst for PFC and as a junior project manager for BNP Paribas.