Balyasny Offers Fee Cut, Greater Liquidity In New Share Classes

Sep 29 2010 | 12:57pm ET

The latest hedge fund set to offer friendly fees and redemption terms to investors is Balyasny Asset Management.

The New York-based hedge fund, which manages about $2 billion, is set to introduce a pair of new share classes. One will offer investors a potential break from Balyasny’s high fees, the other greater liquidity.

Currently, investors in Balyasny’s flagship hedge fund pay 2% for management and 20% for performance, as well as compensation costs for its investment teams. Those fees regularly add up to more than 30% of returns, Bloomberg News reports.

Now, well-heeled investors—those willing to pony up at least $10 million, anyway—will have the option of paying 2% for management and 30% for performance, rather than paying the variable compensation costs. But investors in the new share class will see their money locked up for a year, with a 4% early withdrawal penalty.

Investors more worried about liquidity can instead choose Balyasny’s other new share class, which will continue to charge 2% and 20% along with the compensation costs, but which will feature monthly liquidity from day one. The lower-fee share class will offer quarterly liquidity after the first year.

Balyasny’s fee cut comes after two other prominent hedge funds, Citadel Investment Group and Renaissance Technologies, announced plans for similar moves.


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