Hedge funds of funds want the hedge funds they invest in to charge lower management fees and levy performance fees on a three-year rolling basis.

Fees have moved from 1 per cent a year plus a 20 per cent performance fee in the early days of funds of hedge funds to a norm of 2 and 20, said Alexandre Col, head of the investment fund department at Banque Privée Edmond de Rothschild. The Geneva-based group has run funds of hedge funds since 1969 and has $8bn (£5.2bn, €5.9bn) under management.