Are hedge fund limited partners in the driver's seat right now? Or do hedge fund managers still hold all the cards? This has been a percolating issue since the implosion of 2008, with the general consensus--one that we have bought into--being that the power pendulum has swung in favor of investors. They want more assurances on compliance issues, demanding third-party administrators and the like. They want more favorable gateways and they want a break on fees. All of that has occurred.

The New York Times recently suggested that "rationality may be breaking out in the hedge fund world." One issue here is what effect this will have on the hedge fund managed account trend. The conventional wisdom is the managed accounts offered a compelling antidote to the downside of the traditional hedge fund structure. Industry participants have been saying for years that the idea was catching on.

But if the hedge fund industry has changed a bit, does this remove the primary impetus behind the movement? One could argue as much. Still, the benefits of managements accounts will likely be enough to power growth, perhaps at a slower rate, but growth nonetheless.

A lot of investors remain wary of the hedge fund industry and would like greater control no matter how terms have changed. It's quite possible that as hedge funds put the past behind them, the power pendulum will swing back in their favor.

For more:
- here's the Times article

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