One of the great financial mysteries of our age is why hedge fund fees are still so high.

Investors constantly moan about fees and the returns from most hedge funds in recent years have not remotely justified the huge sums the managers have extracted. Yet fees remain extortionate. While the old standard of "two and 20" - a 2% annual charge plus 20% of investment gains - has been eroded, the average for new funds is 1.6% and 18%, according to Hedge Fund Research.