Should You Want To Invest In a Hedge Fund That Doesn’t Want A Performance Fee?

With certain fund managers struggling to beat stock market index benchmarks, investors have been questioning why they should pay management and performance fees when there isn’t much performance? Maverick Capital’s Lee Ainslie thinks he might have the answer. The flagship stock-picking fund, which is now managed Andrew Warford, and which is down 2% this year through September after losing 10% last year, is ditching the performance-based fee, The Wall Street Journal first reported.

This begs the question: should investors really want a manager won’t accept payment based on their performance? After two years of negative performance hedging for a market crash that never came, Ainslie is ditching the fund’s 17.5% performance fee for existing investors putting new money into...