Scotia Cap, RBC Vets Plan Low-Fee Hedge Fund

Jun 7 2010 | 1:58pm ET

Two Canadian bankers have launched a hedge fund with terms designed to appeal to wary investors.

East Coast Fund Management, the brainchild of John Schumacher and Mike MacBain, will eschew standard hedge fund fees and restrictive redemption policies, the Globe and Mail reports. The Toronto-based firm will charge a variable management fee—starting at nothing for those who invest before July 1, and will only take its 20% cut of profits after it has returned at least 4% per year.

“We think 2 and 20 is ridiculous,” Schumacher, former co-CEO of Scotia Capital, told the newspaper.

East Coast will also feature a permanent high-watermark and a lockup of just six months.

“We don't want to hold anybody’s money for ransom,” MacBain formerly head of debt capital markets at RBC Dominion Securities and president of TD Securities, explained.

MacBain and Schumacher hope to raise C$100 million for the credit fund, which will target returns of between 8% and 12%. So far, that hasn’t proven a problem: In a year of running their own money, the East Coast founders have returned 31%.


In Depth

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Cash: An Asset In Adolescence

Aug 31 2017 | 3:34pm ET

If the investment industry has a rebellious teenager in the house today, that teenager...