We've discussed at length the fee structure of hedge funds, which is increasingly leading to massive payouts for big-fund managers even in so-so years. The New York Times notes that the flagship hedge fund at Goldman Sachs lost 6 percent last year, but it still brought in a lot of fee income. Bridgewater Associates has returned less than 4 percent the last two years; its founder made $350 million in 2006. Many are predicting that the awkward circumstance of good pay against poor performance will continue. There's just so much money flowing into funds still. The larger issue is whether hedge funds are still worth it. The answer according to the big institutions seems to be yes.
Our take on this news: How any investor tolerates these high fees is beyond any of our comprehension. This industry is ready to collapse on its face with total disregard to its investors. Greed always ruins any moneymaking situation.
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