Kames Capital is dropping the 20% performance fee on its UK Equity Absolute Return Fund until the end of the year, after which the fee will return at 10%.
Kames Capital, owned by Dutch insurance firm Aegon, said that dropping the performance fee will encourage inflows into the fund, which has raised £65 million (€78 million) since launching in February 2010. Performance fees, which reward asset managers for beating their investment target, are viewed as unfair by many investors, who believe unit holders should get the entire benefit from a fund’s outperformance.
In recent years, when markets have been volatile, many asset managers have failed to hit their investment targets.
The UK Equity Absolute Return Fund was structured so that Kames Capital received 20% of all returns above the Bank of England base rate, which is currently set at 0.5%.
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