How best to align the interests of managers and their investors has long been a hot issue in the world of funds but, as Orbis Investments' Dan Brocklebank tells Cherry Reynard, the answer is straightforward enough
How best to align the interests of managers and their investors has long been a hot issue in the world of funds. A percentage-fee model has tended to incentivise managers to grow funds as large as possible, for example - and often to the ultimate detriment of performance. Performance fee models have also been controversial, with poor structuring meaning managers can actually be rewarded for failure. Orbis believes it has a solution - though first it is worth considering the problem in greater detail. The reality for active managers is that investors can access the market return very chea...
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