Alternative investment consultant Albourne Partners has been named as the sector’s most influential name in HFMWeek’s annual investor Power 30 rankings, as it leads the charge on fee innovation and transparency.
Albourne’s efforts in promoting a new ‘1 or 30’ fee structure, which sees managers earn either a 1% management fee or a 30% share of alpha-generated performance over a benchmark if that becomes greater, has been tipped as a hugely significant move by prime brokers and managers canvassed for HFMWeek’s research highlighting the industry’s 30 most influential investor-related firms.
Well over 50 hedge fund managers are implementing the new fee structure which Albourne has been pushing alongside long-standing client, the Teacher Retirement System (TRS) of Texas.
A number of other investors are also asking managers for similar deals.
Albourne advises clients with over $400bn in hedge fund and other alternative assets and given its reach, alongside its work on fees, it has knocked the Abu Dhabi Investment Authority (ADIA) off the top spot.
ADIA, which manages over $800bn, takes the number two spot, while the $814bn China Investment Corporation, another sovereign wealth fund with over $100bn invested in hedge funds, sits in third position.
A recent HFMWeek poll of 200 managers found that half of them were “seriously considering” moving to a 1 or 30-type model.
Referred to by Albourne as an ‘or’ structure, the use of a management fee recoup can also be applied to a larger or tiered management fee, while the performance hurdle calculations can also be modified, by using a longer investment horizon, for example.
Disclosure: The 2017 HFM Investor Power 30 List is a subjective compilation based on the opinion of HFM editors and consequently, the results may no longer be current or applicable. Albourne Partners is not in position to know how many firms HFM considered for this award, but the firms that appear on this list were judged on criteria such as: pushing for more consideration of environmental, social and governance factors; demanding customised structures or co-investments; leading the charge for better alignment of interest between managers and LPs; its activities over the last 12 months; opinions of managers and prime brokers.Permalink