Hedge funds have consistently charged a management fee of 2 percent of assets and a performance fee of 20 percent of profits since investors began flooding them with money 13 years ago.

But now, as hedge funds' performance has fallen off, investors are demanding lower fees, The Wall Street Journal reports. The voices of institutional investors, who provide hedge funds with the bulk of their capital, are particularly powerful.

In the first seven months of the year, hedge funds averaged a return of 4.5 percent, according to eVestment, far behind the 19.6 percent gain of the Standard & Poor's 500 Index, Reuters reports.

Editor’s Note: New Video: Obama Plans to Redistribute Seniors’ Wealth

Another factor pushing down fees at mid-size and small funds is that investors are increasingly putting their money in the industry's largest funds.

Currently, hedge funds on average charge a management fee of about 1.6 percent of assets and a performance fee of about 18 percent of profits, according to industry surveys and interviews with industry executives, The Journal notes.

Hedge funds investing in stocks and commodities are particularly vulnerable to calls for lower fees because of their recent mediocre performance, the paper says.

"Hedge funds could make the case for charging a 2 percent management fee when they were managing much less money,'' Rhode Island Treasurer Gina Raimondo, chair of the state investment commission, tells The Journal. "But do they still need to charge that much when they are now managing billions, not millions?"

While investors may be pushing hedge fund fees lower, they apparently aren't abandoning the funds.

The number of hedge fund firms with at least $1 billion in assets increased to 287 as of June 30 from 269 at the beginning of the year, according to Absolute Return magazine. And the asset total for the 287 registered $1.57 trillion, up from $1.46 trillion for the 269.

Editor’s Note: New Video: Obama Plans to Redistribute Seniors’ Wealth