Only 15% of European fund managers expected to earn a performance fee in 2009. In INREV’s latest Management Fees and Terms study, carried out in Q4 2009, 219 of the 268 funds in the survey charged performance fees. Of those, 94 had planned to reach their first hurdle rate in 2009, but 85% said they did not expect to meet their targets in present market conditions.
Director of research Lonneke Löwik said INREV is holding debates with its members about the possible impact of the EU’s Alternative Investment Fund Managers directive on fees and bonuses. The directive’s current draft says that fund managers must disclose pay details for all staff earning more than the average of their board of directors, while high earners must defer at least 40% of bonuses for at least three years. Managers of closed-ended funds may also be prevented from receiving their carried interest until their fund reaches the end of its term.