It's been a constant knock on mutual funds and now it's bled into the high-flying hedge fund world. Many hedge funds are focusing on gathering assets instead of generating returns - one big reason why gains have slipped in recent months - a well-known hedge fund investor told Reuters.

But that means more income for hedge funds themselves, because the loosely regulated investment pools usually charge management fees of 1.0% to 2.0%, plus performance fees of up to 20 percent. Mutual funds, by comparison, traditionally charge less, with some barely mustering 50 basis points.

Mark Yusko, president and chief executive of Chapel Hill, N.C.-based Morgan Creek Capital Management, said that as a result the $1 trillion hedge fund industry is now attracting a flood of entrepreneurs eager to collect billions of dollars in fees some hedge fund investors are prepared to pay. He added, however, that the investing acumn of many managers might not be as strong as the industry's best players, who made hedge funds famous with out-sized returns years ago.

"Look for people who are in the business to make returns, not gather assets," Yusko said. "We tend to look for people with a little gray hair or a little less hair."

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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