Open Protocol Intro

Albourne has been leading efforts to promote transparency and encourage better-aligned terms which help to achieve a more consistent and fair share of return between managers and investors. Central to this goal has been the initiative to focus an industry conversation on the “shape of fees.”

One example is our development of the “1-or-30” fee structure, which we also refer to as “X-or-Y”. “X” represents the revenue a manager needs to operate, while “Y” is the ultimate total fees paid (representing management and performance fees together), as a percentage of gross returns. “X-or-Y” better ensures that total fees paid over the investor’s entire investment horizon equal Y% of gross returns.

Albourne nevertheless recognizes that one size does not fit all and that no single fee structure offers the optimal solution to all strategies for all investors.

Albourne therefore advocates for funds to offer a transparent range of economically equivalent fee ‘shapes’ that serve to meet the wide and varied mandates of investors.