Investors are returning to hedge funds, but in a small way, with managers attracting smaller pools of cash and making more concessions to investors.

New hedge funds are also beginning to open their doors, albeit at a slow rate, with 173 fund opening in the third quarter, according to Hedge Fund Research. That’s up from the 119 hedge funds that set up shop in the second quarter and the mere 43 that came into existence in the last quarter of 2008.

Further, “the size of the opening capital base is quite a bit smaller than it has been historically,” John Willian, global co-head of prime brokerage at Goldman Sachs, told The Wall Street Journal. And rather than charge 2% of assets and 20% of performance gains, smaller, newer hedge funds are offering price breaks to investors, depending on how long they are willing to commit their money. For those willing to lock their money up for as long as five years, performance fees are falling to as low as 15%.

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