Fees for new investors are being reduced  by cutting management fees by 0.5 per cent to 1.5 per cent and performance fees from 20 per cent to 10 per cent.

Chris Lombardy of hedge fund advisor Kinetic Partners is quoted as saying that to begin with: “Some managers offered investors fee reductions in exchange for staying in.”

Guy Haselmann, a principal at Gregoire Capital, a hedge fund that invests in funds of funds, said: “Fees are coming down, and they will continue to come down…The funds... want more permanent capital.”

An unnamed hedge fund manager is reported as saying: “It used to be that we gave our standard rate most of the time. Now, new investors paying that would be in the minority.”