More new hedge funds are implementing management fee structures that decrease as fund assets grow, said Steve Nadel, Co-Head of Investment Management Practice at Seward & Kissel. According to the Seward & Kissel New Hedge Fund Study, 19% of respondents adopted a tiered approach to management fees, stepping down to lower rates as assets in the fund surpass pre-established benchmarks. Nadel added that the percentage of all funds using equity strategies increased to 73% in 2014, up from 65% in 2013. He said 81% of funds permitted quarterly or even less frequent redemptions as compared to 89% in 2013. Finally, Nadel said incentive allocation rates continued to be set at 20% of net profits across all strategies.
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