So much for the theory that sagging hedge fund returns would help lower fees: According to MarketWatch, hedge fund star Steven Cohen‘s latest fund from SAC Capital Advisors is a whopper in the fees department – and it doesn’t seem to bother investors. The SAC Multi-Strategy Fund, which launched in December, commands an annual management fee of 3%, a performance fee of 35% and a lock-up of three years, and investors reportedly have been rushing in so fast that the offering has already attracted $2.5 billion of its $3 billion target. For those in the know, it may be no surprise. After all, Cohen’s track record of more than 20% in returns in most years is well ahead of what most hedge funds are doing these days. As Sol Waksman, president of Barclay Group, commented to MarketWatch, “Management fees and incentive fees are still going up. Why? Supply and demand. Marquee managers can always demand and receive premium from investors.” Perhaps the “what goes up must come down” truism applies only to the fees of untested managers.
