The 2023 Seward & Kissel Established Manager Hedge Fund Study (the “Study”) focuses on those Seward & Kissel investment manager clients that have been in business for at least 5 years and manage greater than $1 billion in regulatory assets under management (“Established Managers”). Established Managers utilize different approaches in seeking to increase their assets under management, including the: implementation of new classes in their existing funds; launch of new hedge funds; entry into separately managed account relationships; execution of side letters; and/or the creation of special purpose vehicles (SPVs). However, to best compare the results of this Study to the findings in our recently released 2023 New Manager Hedge Fund Study, this Study focuses solely on those Established Managers that set up new classes in their existing funds or launched new hedge funds in 2023.
Our key findings are as follows:
- 50% of the Established Managers in the Study with traditional strategies had equity-focused strategies, followed by 25% macro and 25% credit strategies
- Traditional strategy fund managers continued to charge a higher management fee with an average of 1.8% in their standard class. Managers with bespoke strategies charged a much lower management fee with an average of .9%
- 25% of the traditional strategy funds did not charge an incentive allocation. For the 75% of managers charging an incentive allocation, the average rate was approximately 22%
- 20% of the traditional strategy funds had a hurdle rate
