A new fund spun out from hedge fund manager Odey Asset Management will only charge investors a 1 percent management fee and zero performance fees, levels sharply lower than traditional industry standards.
The first fund from Latitude Investment Management, the Latitude Horizon fund, has been moved from Odey's hedge fund stable into a UCITS (Undertakings For The Collective Investment Of Transferable Securities) structure.
The fund's fees are being cut as part of the move and represent a steep drop from the historical hedge fund benchmark billings of 2 percent management and 20 percent performance fees. The move highlights the squeeze on revenues in an industry hit by performance woes and rapidly evaporating investor patience.
Latitude founder Freddie Lait told CNBC via email: "We believe clients are changing the way they perceive fees and value. Many absolute return strategies, in particular hedge funds charging 2 and 20, have not delivered value over the past decade. Average annual returns for equity hedge funds have been around 1.5 percent with average annual fees estimated at more than 3 percent per year.