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

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...