finally, a priest for the 21st century!

[Ken Gargett]

The Incredible Shrinking Hedge-Fund Fee

1 Oct 27, 2015 11:37 AM EDT

By Michael P. Regan

There’s a lot to be amused about in the tale of the Rev. Emmanuel Lemelson, the Greek Orthodox priest who moonlights as a hedge-fund manager. Or is he a hedge-fund manager who moonlights as a priest? Hard to say. Maybe it all depends on your denomination.

First, there are the two rules he requires of his flock (talking about his investors here, not his congregation): Pray for the fund and disregard short-term performance, according to the profile of Lemelson in Tuesday’s Wall Street Journal. There is the epiphany Lemelson said he had when he discovered the "good book" -- that would be “The Intelligent Investor” by Benjamin Graham. There’s the candid truth that when investment seeds fall on rocky ground, even men of the cloth stop reporting returns to industry-tracking services like BarclaysHedge.

And there’s also the general sense that some members of the church aren’t exactly thrilled about this mansion-dwelling, motorcycle-collecting millionaire with a wife who drives a Cadillac Escalade.

“He doesn’t belong to us," one church official told the paper.

For sure, the hedge-fund community is probably more accepting of the extracurricular activities of managers. Still, many may pause when they learn this about Lemelson: His performance fee is 25 percent!

“He doesn’t belong to us," many hedge fund managers (probably) exclaimed at this point.

The notion that hedge funds all collect a stereotypical management fee of 2 percent and a performance fee of 20 percent has been dying a slow death in recent years, especially for smaller, newer funds. Average performance fees for newly launched funds last touched 20 percent in 2007 and have fallen to about 14 percent as of August of this year, according to research firm Eurekahedge.