Public pensions tout fee/lock-up concessions

Wed Nov 3, 2010


Institutional investors are flexing their muscles over fees


Post the liquidity crunch of 2008 that spilled over into 2009 and early 2010, it seems that institutional investors – mainly US public pensions – have had some luck in getting a fairer shake.

Utah Retirement System, California Public Employees’ Retirement System, New Jersey State Investment Council and other public pensions are now focused on finding ways to build long-term relationships with hedge funds by agreeing to longer lock-ups.

Utah Retirement System is understood to still be negotiating heavily with hedge fund managers in its portfolio to get fee concessions. The $20 billion retirement system is focused on a deferral of incentive fees, but has been able to get some small breaks on management fees that are set to decline as assets under management grow at the individual fund level. Officials are thought to have structured breaks on incentive fees and hurdle rates. Deferrals on incentive fees, meanwhile, are focused on tax...

ISSN: 2151-1845 / CDC10004H

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