Alpha Fees for Beta Performance.

The article focuses on the worldwide 50% increase in performance fees paid by pension funds in 2008. Paul Tricket of investment consultant Watson Wyatt said that the trend favors the investment managers but not their investors. The report by Watson Wyatt cited the alpha generators including private equity, real estate and hedge funds as the reason for the increase. Market returns from beta investments, on the other hand, were average, analysts say. Investors are really the ones paying the alpha fees for beta performance, the report also stated.