ANCHOR (OFF-CAMERA) ENGLISH SAYING:

Let me ask you about fees, alright? Are we going to see compression of fees continuing in 2013, or are we going to see such demand and this rush of pension fund money come in that for the managers, the fee structure looks a little bit better for them?

DON STEINBRUGGE, MANAGING PARTNER, AGECROFT PARTNERS, (ENGLISH) SAYING:

Well, first of all, there's two sides to that story. For the typical investor, there is very little pressure on fees. You know, management fees on hedge funds have come down a very little bit since 2008. And most hedge fund investors, when they evaluate a hedge fund, fees rank fairly low. They're willing to pay a premium for a very good manager. And if you're a very bad manager, you could give your services away for free and you're not going to attract money. The other side of the story is pension funds are negotiating fees and are paying lower fees than your average investor. But that's also what they do for long-only managers. You know, if a retail investor invests in a mutual fund, you're going to be paying a lot higher fee than a pension fund that would be investing with that same manager.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

I just want to jump in before we run out of time. How about retail investors themselves? You see the hedge fund community broadening out a little bit more this year, right?

DON STEINBRUGGE, MANAGING PARTNER, AGECROFT PARTNERS, (ENGLISH) SAYING:

Yeah, you know, it all depends on what your definition of retail investors is. They're about to pass the Jobs Act, and when they pass the Jobs Act, it's going to make it much easier for qualified investors. Those are people with $1 million or more in assets to evaluate hedge funds. It's been a very secretive industry. You know, you go to websites, they provide very little information. After that, it'll be much easier to identify who the hedge funds are and to compare managers across various strategies. For people with less than $1 million, you know, there are more alternatives to invest in. There are 40 Act hedge funds that are coming out which basically a retail investor could invest in. There's also hedge fund replication strategies relative to ETFs. The only thing I've warned people is you don't want exposure to generic hedge funds. You want to invest in very good managers because most hedge funds aren't very good, but the talented people are very good and you should focus on investing in them.