IAS CIO Mark Baumgartner on Hedge Fund Fees

A couple of years ago, the Chief Investment Officer for the Institute of Advanced Study (IAS) was asked about fees at a hedge fund conference.

We are seeing great discussions around fees and fee reductions and, given where interest rates are, is this the right type of structure to have. I think these are all great discussions to have. Fees are important, fee reductions go right to the bottom line.

But what I say is we rather have, we rather pay full fees, 2 and 20, for a top-quartile fund then have no fees in an average fund, a hedge fund. And so that’s what matters, performance matters. And I think the discussions around fees are very constructive and I think we should continue to evolve that.

You could argue that having high fees and having the ability to make enormous profits is one reason for the existence of the hedge fund industry. You have to have folks who want to make those types of profits to come in and trade and create opportunities for positive alpha generation and negative alpha generation.

The Evolution of Hedge Fund Management – Global Conference 2017, Milken Institute

By the way, what are the responsibilities of an Investment Analyst at IAS?

Specific responsibilities include manager analytics and due diligence, including identifying and sourcing new investment opportunities, researching prospective investment managers, and evaluating managers’ absolute and relative performance; portfolio, asset class, and manager level risk management; monitoring, research, model-building, and analytics, including development of tools to measure optionality, illiquidity, counterparty risk, and other hedge fund / alternatives-centric risk factors; and special projects that arise.

Investment Analyst

Before you apply for the role, learn more about the endowment at IAS by listening to Mark Baumgartner on Capital Allocators.

Episode 77: Mark Baumgartner – Luck, Risk and Uncertainty at the Institute for Advanced Study

Fuld Hall at the Institute for Advanced Study campus.
Twitter @the_IAS

Post by Marcelino Pantoja