LUKANYO MNYANDA: Wierzycka has done investors a favour
Whether her comments are fair or not is almost irrelevant. She’s already done a service by bringing up the subject
Magda Wierzycka’s brutal takedown of the hedge fund industry created a predictable degree of controversy. The announcement that her company, Sygnia, had closed its hedge funds has provoked a furious response from the industry, which she described as "a management-fee racket". Elsewhere in the paper, Giulietta Talevi details the industry’s response. And our colleague, Tim Cohen, has been covering the phenomenon of fees more broadly. Reading Wierzycka’s column, I was most intrigued about her timing. Had she only discovered this now? After all, the debate about whether hedge funds’ performance justified their high fees has been going on for a while. It was a decade ago already that Warren Buffett placed a $1m bet that simply placing money in a low-cost index tracker would deliver superior returns to those from hedge funds, with their typical 2% management fee and additional 20% of profits earned. Buffett won handsomely, with his pick, the S&P 500, gaining about 126% over a period of 10...