HELSINKI, Finland (HedgeWorld.com)–Investment advisor er Capital Management Ltd. launched two new funds of funds this year with a unique fee structure–a management fee of 0% at the fund of fund level, along with a netted performance fee.
A management spokesman said Tuesday that er Capital hopes to eliminate the piling on of fees that has long been an impediment to the growth of funds of funds.
“Performance fees are only charged on new equity highs. If the new equities perform well (as defined against U.S. Treasury bills) but the entire fund is in a drawdown, then no performance fee is charged,” the spokesman said. Er Capital believes this structure is likely to catch on generally.
The new funds are: er Multi Strategy (launched in April) and er Multi Core (launched in July). Multi Strategy invests in four non-correlating strategies: global markets, global volatility arbitrage, equity neutral and convertible arbitrage. Multi Core invests in the same strategies, except that it has no investment in convertible arbitrage.
Jasper Nyberg is the portfolio manager for both funds of funds.
The managing company, er Capital, was established in 1991 by Martin Estlander and Kaj R?nnlund. It’s registered with the Finnish Financial Supervisory Authority.