Research on Performance Fees by Eller Finance Professor Cited in The Wall Street Journal
June 23, 2020
Hedge-fund investor research conducted by Eller College of Management Assistant Professor of Finance, Andrea Rossi, was recently referenced in The Wall Street Journal. The June 19 article (log-in required) explains the impact that ‘performance’ fees charged by hedge-fund managers have on personal returns.
The column cites statistics from the working paper, “The Performance of Hedge Fund Performance Fees” by Rossi and co-authors Itzhak Ben David and Justin Birru of Ohio State University. The research goes in-depth into the long-run outcomes associated with hedge funds' compensation structure.
“From 1995 through 2016, hedge-fund investors shelled out an average of 3.44% annually in management and incentive fees,” reads the article, in reference to Rossi’s research. “The study finds that investors earned net returns of only 1.96% annually—meaning they paid $1.76 in costs for every dollar they got to keep.”
Andrea Rossi joined the Eller College of Management in 2018 after earning his PhD in Finance from Ohio State University. A Chartered Financial Analyst, his areas of expertise include private equity, asset management, investor behavior and corporate insiders. He has also worked as a financial analyst for PFC and as a junior project manager for BNP Paribas.