Citadel Considers Cutting Fees

The hedge fund industry has had its share of hard times since the financial crisis of 2008. Closed shops, massive redemptions, massive blowups. Now one of the largest is considering cutting fees as a result of it.

may consider cutting its fees from the standard 2 and 20. Hedge funds normally charge 2% of assets and 20% of returns to investors to pay their expenses. Citadel's Kensington and Wellington funds each lost about 55% in 2008, and suspended investor redemptions in order to further stem losses. Expenses at the firm are usually around 4-6% of assets, but have risen as high as 8%, says Bloomberg. Last year the funds returned 62%, as the markets rebounded. The fund also reinstated investor redemptions. This year, the funds are up about 4% through the beginning of September.