WSJ – A London-based investor in hedge funds is set to launch a product that will not charge any performance fees, as pressure mounts on a sector that made record losses last year.
Financial Risk Management, a $9 billion (EUR6 billion) fund of hedge funds manager, aims to raise $1 billion for the first fund in its new Principia range. It will be aimed at private clients and allocate money to funds investing in futures markets, and some other strategies.
But in contrast to many rivals, which keep 10% of the profits for themselves, investors will pocket all profits from the fund. FRM will still charge a fee based on assets, and share some of this with distributors – as is standard practice in the long-only world.
FRM’s existing funds for institutional investors charge fees “consistent with the industry’s traditional fee structure,” said Marc Fisher, head of FRM Principia. Funds of funds typically charge about 1% of assets and 10% of fresh performance.
