LONDON/NEW YORK, Sept 14 Hedge fund firm Caxton
plans to cut the fees it charges investors, as the industry
battles against lower returns in the wake of the financial
crisis, a letter to investors seen by Reuters showed.
The multi-manager fund, which employs around 190 staff
across more than 30 teams - said in a letter dated Sept. 13 that
the new fees on its Caxton Global fund would go live on Jan. 1,
2017, and be based on the amount of money invested in the fund.
Up to $100 million and the investor will pay an annual
management fee of 2.5 percent and a 27.5 percent cut of any
outperformance. The management fee then falls in increments to
2.2 percent for those investing above $500 million.
In addition, the fund said it would launch a new share class
for institutional investors prepared to lock up their money for
three years. Those willing to do so would only pay a 2 percent
management fee, the letter showed.
Caxton's chairman and chief executive officer, Andrew Law,
told investors in the letter that the cut in fees was an attempt
to "more closely align aggregate compensation with performance".
Since the financial crisis, a range of factors, including
lower real rates, had combined to hit returns, to such an extent
that the alternative investment industry was now
"inappropriately sized to deliver on clients' return
(Reporting by Maiya Keidan and Lawrence Delevingne; writing by
Simon Jessop; editing by Huw Jones)