Most small hedge funds will be hard pressed to survive over the long haul unless their performance allows them to significantly grow beyond $250 million in assets, according to a comprehensive study of hedge fund business expenses.
The study, published by Citi Prime Finance, found that the average small hedge-fund firm — defined as having $124 million in assets under management — spent virtually its entire 2 percent management fee, or 198 basis points, on firm-wide expenses, and this does not even include compensation for their...