Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a745016

Brevan Howard revamps trust to reduce fees to ‘2 and 20’

by Robert St George on Apr 07, 2014 at 09:47

Brevan Howard revamps trust to reduce fees to ‘2 and 20’

Brevan Howard has proposed amending the investment policy of its £388 million BH Global fund to reduce its costs.

BH Global currently invests in other Brevan Howard strategies, incurring fees on each as well as base ongoing charges of 0.75% at the trust level. The present structure is:

BH Global – Current Fees on Underlying Funds
Management Fee Performance Fee Allocation % of net assets
BH Credit Value 1.00% 15% 2.4
BH Master 2.50% 25% 45.3
BH Credit Catalysts 2.00% 20% 15.4
BH Systematic Trading 1.00% 12% 7.5
BH Asia 2.00% 20% 9.8
BH Commodities Strategies 2.00% 20% 6.1
BH – Emg Mkts Local Fixed Income 1.00% 20% 3.2
BH Emerging Markets Strategies 2.50% 20% 0.2
Cash - - 10.3
Sources: Brevan Howard; Numis. Allocation at 28 February 2014. An additional management fee of 0.5% is charged by BH Global.

Under the new policy, BH Global will instead invest directly in the open-ended £2.6 billion Brevan Howard Multi-Strategy Master fund.

This will not change the trust’s management, but will mean its assets no longer incur the same underlying fees.

According to Brevan Howard, this would change the trust’s aggregate costs to a 2% management fee and a performance fee of 20%.

Ewan Lovett-Turner, an analyst at Numis, observed that the previous fee structure had possibly deterred some investors. ‘We believe this had been one of the factors contributing to the persistent discount which has averaged 10% over the last year, and is currently 8.7%,’ he said.

Over the past three years BH Global has returned 13.3%, compared with a 27.7% rise by the FTSE World index.

1 comment so far. Why not have your say?

oneman

Apr 07, 2014 at 11:32

The days of 2 & 20 should be consigned to the history books - let alone anything higher than that

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

The Citywire guide to investment trusts

Investment trusts have proved to be a highly effective way to invest in the market. Citywire has interviewed the experts to find out more.

Sponsored Video: Barings on investing in Frontier Markets


From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.

More about this:

Look up the investment trusts

  • BH Global GBP (Ordinary Share)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Archive

On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet