With hedge fund managers' lucrative performance fees having taken a hit along with the rest of the economy, one town's real estate market is paying the price.
Greenwich, Conn., where hedge funders had set up shop in droves after tiring of the Manhattan commute, has seen its uber-luxury home inventory skyrocket recently, the New York Post reports.
Hedge Fund Research reported in July that, for the first half of 2011, hedge funds had lost 2.1 percent of their value on average, according to StreetInsider.com. Prior to the financial crisis, many managers oversaw funds that posted gains well above 10 percent. On top of management fees, managers are typically paid 20 percent of the profits they generate. Back in the glory days, that meant big, big bucks, especially since the performance fees were treated as capital gains and therefore only subject to a 15 percent tax rate.
But now many managers, due to their funds' poor performances, only receive a staid management fee -- typically 2 percent of a fund's total worth. Some of the bed-of-roses mansions in town are even facing foreclosure.
See our gallery below of Greenwich, Conn., mega-homes for sale.
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