Matthew Lynne at Bloomberg.com examines what price the market puts on hedge fund profits. Lynne notes that many hedge fund managers pull down enormous salaries, but the few hedge fund companies that are public do not receive premium valuations from the market. This may be due to the belief that there is not a great deal of growth in hedge fund fees, due in part to fee compression. Lynne writes:

There is a straightforward explanation for that. The relatively low price put on the hedge fund companies says two things. First, the rapid growth rates of the industry probably won’t last. Next, the 20 percent performance fee that hedge funds typically charge can’t last, either. In effect, the business model the hedge funds have created won’t work much longer.

As Lynne notes it is surprising that more hedge fund managers have not come public. It would certainly aid trying to create more long-lasting enterprises. Then again, given the current regulatory environment, would you blame the managers for wanting to remain private?