Under Fee Pressure, Hedge Funds Cut Headcount But Increase Regulatory, Cyber Security Spending

Large funds with assets under management are launching new products such as liquid alternatives, finding high demand, a study from EY Consulting finds. However, due to fee pressure profit margins at the large funds are coming under pressure.

Smaller hedge funds focus on increasing growth

Unlike the larger programs, mid-sized and smaller hedge funds, on average, tend to focus on increasing growth through their existing offerings, while the growth strategy of Fund of Funds managers is by creating registered liquid alternative products, the study concluded. While observing dramatic growth, EY cautioned about a herd mentality and entering into new products too rapidly.

As fund fees come under pressure, fund...