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Manager Clobbers Hedge Funds On Fees
If James Altucher had his way, hedge fund management fees would be reduced to just 50 basis points and performance fees would be a thing of the past.
If James Altucher had his way, hedge fund management fees would be reduced to just 50 basis points and performance fees would be a thing of the past. Writing in his Financial Times column, Altucher, a partner at New York-based Formula Capital, offers two justifications: The industry has suffered “death by indexing,” as the 12 or so indices that track all the movements of hedge funds have “flushed down the toilet” $1 trillion at the hottest ones. No. 2: exchange-traded funds can simulate hedge funds without the magnitude of the fees generated by them. Altucher takes a swing at the industry, which he calls a “thriving juggernaut,” as he notes that it has “sucked all the manpower out of every other crevice and hole in Manhattan and many other cities as well.” He express sorrow for “all the junior analysts doing the reverse commute out to Greenwich, just in time,” he says, “to watch the Great India Outsourcing of 2008 occur,” making a first-hand report, as Altucher says he’s been doing it, too.