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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
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.<\/p>\n