PT  - JOURNAL ARTICLE
AU  - Andrew M Weiss
TI  - Would Hedge Fund Investors Benefit From Paying Operating Expenses?
AID  - 10.3905/joi.2004.391046
DP  - 2004 Feb 29
TA  - The Journal of Investing
PG  - 91--95
VI  - 13
IP  - 1
4099  - https://pm-research.com/content/13/1/91.short
4100  - https://pm-research.com/content/13/1/91.full
AB  - The standard hedge fund contract calls for the manager to pay all the expenses, an arrangement that may hurt investors. A profit-maximizing manager would not make some expenditures that might increase total returns, as the manager pays all the costs and gets only some of the benefit. The manager will outsource with prime brokers or accountants even if those services could be provided more efficiently internally. An inefficient risk-sharing creates incentives for the manager to make the wrong investments from the viewpoint of the investors.