Caxton Cutting Fees

Oct 15 2012 | 8:33am ET

Caxton Associates, the $7.5 billion New York-based hedge fund, will lower the fees it charges clients.

The fund, which had been charging a 3% management fee and 30% performance fee, will cut those to 2.6% and 27.5%, reports the Wall Street Journal, citing people familiar with the firm.

That still puts the fund's fees above the industry standard 2% and 20%. Caxton has been able to charge  high fees because, since its inception in 1983, it has produced annualized returns of about 20%. Since 2008, however, the macro fund—like other macro funds—has produced more muted returns. Last year, the fund returned 0.7% and, in a letter described to the WSJ by investors, Caxton chairman and CEO Andrew Lane acknowledged the lower recent performance.

In deciding to cut fees, Caxton follows managers like Tudor Investment, which introduced a new share class for its flagship fund carrying fees of 2.75% and 27% (compared to 4% and 23%) and the $7.3 billion Graham Capital Management which is reportedly considering cutting fees for its Proprietary Matrix hedge fund.

Caxton was founded in 1983 by Bruce Kovner and Peter D'Angelo, both of whom retired last year.


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