Fees are the main obstacle preventing pension schemes from investing in hedge funds, according to a report.
A study by the asset management exchange AMX concludes that high management fees are the key hindrance preventing pension schemes from investing in hedge funds.
A lack of transparency regarding additional costs is another factor which discourages pensions funds from investing in hedge funds, the report found.
The research, which surveyed 200 individuals with investment responsibilities for pension schemes, claims the other obstacles to investing in hedge funds are: insufficient risk reporting (according to 32% of respondents), difficulty of comparing fund performance (26%) and inability to govern individual funds (25%).
Oliver Jaegemann, global head of AMX, said: “With pressure to reduce costs in the industry, many pension funds may naturally steer away from high management fees, leading to lower investment in hedge funds.
“By increasing transparency surrounding costs and fees, and streamlining these to increase cost efficiency, we believe we can encourage pension decision makers to consider investing in hedge funds – giving these pension schemes access to a wider range of options and opportunities.”
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