Hedge fund performance fees down 11% in 2019

The average performance fee charged by hedge funds fell 11% between the end of 2018 and October. As of Oct. 31, the average performance fee was estimated at 13.3%, down from 15% at the start of the year, while the average management fee fell to 1.16% from 1.24% over the same time period.

Hedge fund fees have been trending lower since the halcyon pre-financial crisis days as performance has made it hard for newer funds to justify their fees relative to public equities. This year's decline, however, broke from their more recent leveling off between 2013 and 2018 when fees appeared to be stabilizing.

Year-to-date Oct. 31, the Eurekahedge Hedge Fund index gained 6.3% on a total-return basis. Global macro strategies were the top-performing substrategy with a 7.75% return, followed by long/short equities with a 7.36% gain.