unfair legal restrictions on hedge funds?

[ebonyeyez]

do you think that prohibition on charging incentive or performance fees to hedge fund managers is unfair? why or why not? i personally feel like they should be able to do this to a certain extent....does anyone else think this restriction is too harsh?

[Coda1108]

Some consider this to be over-compensation for the fact that most hedge funds are so unregulated, and were even more so for many years. On the other hand, many hedge fund managers have their own personal money invested in the funds they manage, and are compensated that way. I don't feel it's unfair because on the one hand managers may be unable to receive incentive or performance fees, on the other hand their trading practices are much less restrictive and therefore they create great risk. Performance / Incentive fees kick in when profits are made but there's no downside to negative performance for the fund manager. Because of the nature of hedge funds, the manager would be tempted to take greater risk; causing greater volatility with the intention of creating higher incentive fees for themselves. However there's no personal downside risk to this if they have incentive fees.

[elvenrunelord]

Just to transfer money from one hand to another hand, I think the fees are to high even with the regulations. People don't seems to understand that all these middle men are contributing to inflation in a rather sneaky way. See them as a tick on the world economy getting fat off the lifeblood of that economy.

A 1-2% fee is high enough to allow them to earn a respectable living and even that after a point is to much. Hedge funds are being implicated in the oil speculation problem that has been uncovered recently too so considering i'm paying like twice what I was for gas in just a couple years I'm not to concerned with restrictions on people who have been implicated in causing this misery for millions around the world.