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Absolute Insight accused of 'milking' clients with fee hike
by Emma Dunkley on Jul 20, 2011 at 15:36
Although existing shareholders will be unaffected by the change, which is due on 30 September, new investors will be paying the higher performance fee of 20% instead of 10%.
The fund, managed by Insight’s head of credit Alex Veroude, uses a range of credit-related strategies to achieve positive returns over its cash benchmark, while focusing on mitigating downside risk.
Investing on a global basis, the fund uses a full range of physical and derivative instruments relating to credit.
The move to boost performance fees is the latest in a range of charge hikes, including Standard Life Investments, which raised its annual management charges on Harry Nimmo’s UK Smaller Companies fund and the Global Equity Unconstrained fund to 1.6%, up from 1.5%.
City Asset Management’s research director James Calder said this was ‘another shocking example of an asset manager holding loyal clients to ransom’.
He said performance of Absolute Insight’s Credit fund has been nothing short of spectacular, up 83.8% since launch, but in recognising this performance the firm is ‘milking’ clients for more revenue.
He added this has left ‘a very bad taste in his mouth’ although he believes it is becoming much more of a common trend in the industry.
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