Centaurus Cuts Assets, Fees In Face Of Slow Natgas Market

Aug 11 2011 | 11:28am ET

Centaurus Capital has returned as much as $1 billion to its investors and slashed its fees in the wake of its first-ever down year.

The Houston-based firm told investors in May that it would return between 10% and 20% of its $5 billion in assets amidst a paucity of opportunities. The money was to be paid out on June 1, allowing Centaurus to "maintain an aggressive risk/return portfolio," firm founder John Arnold wrote.

"While the U.S. natural gas market continues to grow in volume, when measured in dollars, it has shrunk significantly over the past few years as a result of persistently low prices," he complained.

Arnold also announced a significant fee cut: Management fees cut in half from 3% to 1.5% and performance fees reduced to 30% from 35%. But those carrots are at the end of a fairly unpalatable stick: Investors who stayed with Centaurus after June 1 had to accept a new one-year lockup of their assets.

It is unclear how many investors chose to redeem their capital instead of acceding to the new lockup.

Centaurus' moves were first reported by Opalesque.

Centaurus lost 4% last year, it's first-ever annual loss. The firm, founded in 2002, had returned 30% in 2009.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of