New fees will ruffle feathers
The new management fee structure adopted by Infiniti Capital is likely to ruffle a few feathers in the fund of funds industry. The Swiss investment house is launching a fund of funds, for wealthy individuals and institutional investors, on a zero entry fee basis.
"As far as I am aware, we are the first fund of funds to do so," says Anric Blatt, chief executive of Infiniti. "While we may get fan mail from clients, we could also get hate mail from competitors," he jokes.
The idea behind the concept is to increase transparency - a process dubbed "going naked" by Blatt. "Recent history of fraud, overcharging and lack of transparency by banks has made clients wary. With the new fund of funds, clients can see where their money is going," he says.
The fund of funds follows the structure of Infiniti's present managed accounts, with clients' money being divided into three sub-funds with varying levels of risk.
But instead of the 2% entry fee and 20% performance fee, the new fund of funds will have a straight 25% performance fee of the increase in NAV. The 5% margin will go towards paying the distribution partners.