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Fee fears

The equity markets have tumbled in recent weeks. No one would necessarily blame the way fund managers are remunerated. It is driven by oil prices, fears about inflation and global uncertainty.

But Iimia’s Nick Greenwood says that with such market uncer-tainty, many managers may be taking profits and he is concerned that, in some cases, they may be doing so prematurely because of the way they are paid, particularly those driving the market from hedge funds.

Some fund managers may be getting too much of a good thing and living in performance-related heaven at very generous levels. Of course, performance-related fees look good on paper for aligning fund manager and investor interests but in this case there can be too much of a good thing.

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