By most accounts, hedge funds are attracting asset inflows after a long stretch of net redemptions. But investors aren’t willing to fork over funds on the same terms as before. As a result, hedge fund managers are preparing for a “less lucrative, more transparent future”.

Two recent surveys—one of investors, the other of fund managers—paint a picture of widespread haggling over fees, redemption terms and the like. Around 30% of both investors and fund managers say that they have already negotiated lower fees. More notably, 22% of investors who have not yet pushed for lower fees expect to soon, twice the share of fund managers who expect to implement changes to fees.

Given the ill will stoked by Madoff, Rajaratnam et al, as well as the old adage that beggars can’t be choosers—despite recent inflows, assets under management remain well below the pre-crisis peak—investors are more likely to have the upper hand.

HF surveys 11-11-09