Emma Trical at TheStreet.com reports on the difficult environment for fund of fund shops. Mediocre performance, high fees, competition from multi-strategy funds, and illiquidity are all putting pressure on smaller, fund of fund shops. While funds of funds are still the starting point for many investors forays into hedge funds, their position as middleman is becoming more tenuous.

Bloomberg.com reports that hedge funds will pay Wall Street a record $7.5 billion in prime brokerage fess this year, up 32% from 2003. Note an earlier discussion on the growing power of hedge funds on Wall Street here.

How often do you hear hedge funds outrage over breakfast prices?