Demand for fee discounts widespread in Asia, says Citi survey

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A global survey of early-stage investors focused on hedge funds shows that the majority of those based in the Asia-Pacific demand a significant discount on performance fees charged by start-up hedge fund managers.

Hedge fund managers typically set a 20% performance incentive fee but the survey revealed that APAC investors demand on average discount of 611 basis points for allocating to funds at the early stage of a fund’s life cycle.

The Citi Prime Finance survey showed that 78% of Asia-based respondents expect discounts ranging between 500 to 1000 bps.

Investors in the US, however, appear to be