Summary of findings

Over 90% of respondents to the survey indicated they would be supportive, in principle, of the introduction of a performance fee, in exchange for a reduction in base fees.

Of the 10% who indicated they would not be supportive, many of their comments centred around not being able to give a yes / no answer without knowing the full details. Other comments were around whether we were creating the wrong incentives and whether this was an appropriate pay structure for staff.

Those who gave in principle support were then asked to comment on an initial proposal for a 15% performance fee and a 0.15% reduction in base fee, and the use of the MSCI All World Index as a performance reference.

The fees suggested were supported (or investors were indifferent to) by 66% of people who responded to that question.

Of the investors who were not supportive of the proposed performance fee benchmark, or the actual fees proposed, there were a number of common concerns expressed in the questions which prompted for comments.

These concerns are listed below and Forager hopes that these have been addressed in the revised fee changes and communications above. Most significantly, the proposed performance fee was reduced from the 15% that was canvassed in the survey.

– A 15% performance fee for a base fee reduction of 0.15% was not the correct trade-off.

– A 15% performance fee is too high.

– Concerns about a fee being earned when Fund performance is negative, even if there was out-performance against the index

– The fee should have a minimum hurdle – absolute or % above index.

– Wish to see periods of underperformance made up.

– MSCI is not the right index / Fund might become index aware.

– Potential for unnecessary risk taking

– Concern that focus will become short term

– Concern that this is the wrong incentive producing the wrong sorts of behaviours