That "raises the question as to why they accept to pay this level of fees," said Oliver Gottschalg, a professor at the HEC School of Management in Paris who conducted the study on private equity fees.
CalPERS' private equity fees under the microscope.
This should include investment opportunities available under the plan, plan fees, equity trade fees, and tools available to assist you in maintaining your account.
Even so, two prominent members of the Senate Finance Committee, Max Baucus and Chuck Grassley, met industry executives and academics last month to explore the tax treatment of private-equity fees.
But because hedge funds and private-equity fees are higher than normal often a 2% annual fee and a 20% performance fee the effect of the shift would be to lower the average return of investors, not increase it.
The New York attorney general's investigation into private equity management fee conversions appears to have originated from a whistle-blower claim.
"I'm predicting it's going to be a major part of our company's financial future," Mr. Thompson said of the practice of accepting equity for fees.
In the institutional sector fees for traditional fund management have dropped, but clients have been tempted into alternatives like hedge funds and private equity, where fees are much higher.
Interest | Clifford Warren, a senior Internal Revenue Service official, said at a recent legal conference that the agency was "studying" a technique that can lower taxes on private equity management fees, The Wall Street Journal writes.
Pensions trustees now question the higher fees charged for active fund management.In an attempt to revive fortunes, some established fund managers are expanding into alternative investments, such as hedge funds and private equity, where fees are more rewarding than for conventional money management.
He voiced concern about the number of large institutions, like endowments and pension funds that are reducing their exposure to stocks but increasing their allocation to private equity — high-fee pools of capital that are buying up large-cap stocks at large premiums.
