Understanding Hedge Fund Fees: Implications for Hedge Fund Managers

K&L GATES BACKGROUND: GENERAL FEE TRENDS The current situation and immediate future More launches than closings for 3 consecutive quarters More redemptions expected for a variety of reasons, including: Strong performance of S&P 500 YTD (+16.78%) ■ Investors' continuing cash needs / pressures from leverage providers Challenging trading conditions -- volatility Additional investors being freed from lockups Many funds still closing down; the rest need to retain old capital and attract new to thrive S klgates.com 3

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