Taking a page from the play-a-books of NYC employee pension officials, California pension guys and gals, adult entertainment stars, Cliff Asness, Warren Buffett, Bill Gross, and Howard Marks*, Tony James casually mentioned to Bloomberg today that he thinks the ole 2-and-20 is a total scam, not that it matters as hedge funds are going down for the dirt nap anyway.
The $2.9 trillion hedge-fund industry may lose about a quarter of its value in the next year as performance slumps, said Tony James, Blackstone Group LP’s billionaire president. “It’s kind of a day of reckoning that we face here,” James said Wednesday in an interview with Bloomberg TV Canada’s Pamela Ritchie at a conference in Toronto. “There will be a shrinkage in the industry and it will be painful. That’s going to be pretty painful for an awful lot of places.” [...] James also called out hedge-fund managers for the fees they charge, which are typically 2 percent of assets and 20 percent of investment profits -- a structure he said “is hard to justify these days.”
*Please note, Marks thinks HIS fund should collect fees, but crappier funds should not.