Hedge-fund fees eat up half of clients' profits

NEW YORK, Jan. 21 (Xinhua) -- Just over half of the hedge fund industry's total gross performance was eaten away by fees over the past two decades, The Wall Street Journal has cited LCH Investments.

That compares to about 30 percent between 1969 and the early 2000s, said the company, which manages and advises on investments in hedge funds on behalf of investment firm Edmond de Rothschild and other investors.

"This increase in the proportion of gross gains being paid away in fees is clearly not to the advantage of investors," said Rick Sopher, chairman of LCH.

Viewed another way, hedge funds have earned 3.72 trillion U.S. dollars since the late 1960s -- and kept nearly 1.8 trillion dollars of that in fees, said the report.

"The worsening ratio of fees to gains reflects how hedge-fund returns have moderated in recent years, while fees, especially fixed management charges, have crept higher," it added.