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A growing number of hedge fund managers are trying to persuade investors to back new ventures by offering discounted fees to help make up for losses at failed funds. The latest are the $3bn London hedge fund Endeavour Capital and the $2.5bn flagship fund of New York’s Drake Management (see separate report), both offering to waive performance fees on new funds until they have made back the disastrous losses that prompted their closure. The moves break with a tradition of hedge fund managers simply setting up a new fund, thereby avoiding the so-called high water mark – the rule that 20% performance fees are paid only on profits that beat previous highs.