Englander Blasts 'Arbitrary' Management Fees

Nov 10 2010 | 11:38am ET

Millennium Management founder Israel Englander took the opportunity of a rare public appearance to take his fellow hedge fund managers to task on management fees.

Two percent is "an arbitrarily pre-established" management fee that has hurt the hedge fund industry's entrepreneurial instincts, Englander told the Terrappin Hedge 2010 conference in London yesterday.

"The real problem with the two and 20 structure was that the manager's incentives changed," Englander said. In particular, the incentive to increase assets under management pushed hedge funds to expand outside of their competency to increase management fee revenue.

"Name me another industry in the world that has a management fee like this," he challenged. "If a manager has skin in the game, why would he create larger costs that are unnecessary?"

"For 20 years, one thing has not changed, especially not at Millennium," Englander boasted. "We get paid strictly on performance, not on promises."


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.