Stark Offers Fee Breaks After Principals Quit

Jul 14 2010 | 12:18pm ET

In the wake of the exits of one-third of its principals, Stark Investments is sweetening the pot for its investors—if they’ll agree to a one-year lockup.

The $4.4 billion firm offered fee breaks to investors who agree to leave their money with the Milwaukee, Wisc.-based firm until the end of next July. Clients who hold about 20% of the firm’s assets are “set to commit” to the new lockup deal, Stark told investors in a letter.

Those investors who accept the lockup will win a management fee reduction of between 0.125% and 0.25%, depending on the size of their investments. They will also see their performance fee rate cut to between 10% and 18.5%. The fee reductions would kick in after Stark hit certain thresholds and would apply for two years.

At the end of June, 5 of the firm’s 15 principals, including its president and the heads of its European business, left the firm amidst disagreements about Stark’s future. The firm has seen almost half of its assets disappear over the last year-and-a-half.

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…