In Rare Move European Hedge Fund Waives Annual Fee

April 25, 2012 James Heinsman Hedge Fund News

In an industry known for its high fees it is considered quite exceptional that Axiom UCITS Alternative Investable Index Fund has nixed its annual 1 percent management fee and instead instituted a 10 percent performance fee.

The fund invests in an index of EU-regulated hedge funds, and was founded in December of 2010. The index that the fund tracks is composed of 50 onshore ‘Ucits’ funds, which cover a broad range of hedge fund strategies.

The hedge fund industry has come under some public criticism lately as a place where some top managers can earn upwards of billions of dollars annually and still charges their clients high fees. It is not unusual for a fund to charge 2 percent annually in management fees, and sometimes even more, regardless of whether or not the fund has made money. On top of their management fees the funds typically charge a 20 percent performance fee.

Axiom is trying to break away from this model, as Alessandro Mauceri, chairman of the board at Axiom explained. The hedge fund industry "has to reinvent itself or to die."

"The Axiom fund addresses clients' ongoing concerns regarding traditional funds of hedge funds, notably their opacity, lack of liquidity, the operational risk linked to such structures and the multiple layers of fees," Mauceri said.

Alessandro Mauceri, Axiom UCITS Alternative Investable Index Fund, management fee,

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