Photo: Latin America Hedgefunds
Latin American hedge funds solid performance during the economic downturn has allowed them to continue charging the “2-and-20” lucrative fee and continue to attract investors.
Latin American hedge funds are being viewed as relatively safe and able to handle global economic crisis. During the depth of the global economic crisis these funds only lost 4.93% in value versus 10.78% for everyone else. And last year Latin American fund managers gained a respectable 9.84% return compared to the industry average of 10.83%
These solid performances have attracted new investors, especially those looking to going outside of developed economies. The region was the only one that recorded net positive assets in the range of $5.9 billion.
Latin America hedge funds are also able to command the lucrative fee structure that other funds with poor performances have had to shy away far. The “2-and-20” fee structure allows the managers to charge management fees of 2% of assets plus 20% of profits.