Exclusive | Hedge-Fund Investors Extract Lower Fees in Response to Subpar Returns.

Hedge-fund investors, including pension plans, are demanding fee models that align fund managers' interests with theirs. ExodusPoint Capital Management, a prominent hedge-fund manager, is introducing a new class of shares that tie incentive fees to the yields of short-term government bonds. This arrangement, known as a "cash hurdle," means that fund managers will not take a cut of any investment gains unless they outperform the returns available on cash. Investors are pushing for better terms due to higher interest rates and the availability of lower-cost investment options. [Extracted from the article]