Platinum Capital Management is set to launch a distressed debt and a China fund. It has also reduced fees on some of its single manager products and fund of funds.
Platinum is set to launch the distressed debt portfolio following the acquisition of the First Boston Special Situations fund.
The China fund will launch in late October and will be a single strategy hedge fund that invests in Chinese equities.
From September 2003, investors in all Platinum funds will benefit from the lower annual management fee of 1.5% (previously 2.5%) and substantially lower performance/incentive fees at 10% (previously 25%), based on net new high watermark calculations.
These reductions are now possible as a result of more favourable rates being offered by Platinum fund underlying investment advisers, due to Platinum funds significant growth in size. By increasing the investment in the funds, it has also reduced the TERs of the funds.
Craig Reeves, managing director at Platinum, also thinks with equity markets increasing, hedge funds that have high fees will not attract customers.
It is possible hedge funds could see a slowdown over the next few years and there could be increasing pressure on fees, to remain competitive it will be necessary to reduce fees.
Peter Sprecher, chairman at Platinum, said: "We are pleased to be able to offer our customers such a dramatic drop in management and performance fees. It is only due to their ongoing investment and continuing loyalty that our growth has developed in such a way to make these fee cuts possible."
These reductions will apply to the following funds: Platinum All Weather; Platinum Equity Plus Fund; Platinum Washington Fund; Platinum Wealth Management Bond; Platinum Capital Protected Equity Plus Fund; Platinum Capital Protected Income Plus Fund; Platinum Capital Protected Income Plus Fund; Platinum 110% Protected Equity Plus Fund; and Platinum 110% Protected Plus Fund.
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