At a time when the hedge fund industry is facing increasing criticism for charging sky-high performance fees while returns lag, Wheelhouse Capital, which will begin accepting outside money next month, is going a long way to promise it won’t make money unless its investors do.
The Bronxville, N.Y.-based firm’s first hedge fund, a long/short U.S. equity offering that uses exchange-traded funds to implement its trading strategy, charges a standard 1.5% management fee and 20% performance fee. But, according to managing partner Charles Bryceland, figures can be deceiving.
“Our strategy is unique and more investor friendly than a lot of the strategies out there,” he says. For one, the performance fee is tied to the Standard & Poor’s 500 Index, rather than the Treasury bill rate. And that 20% performance fee is charged only on returns over and above the S&P500 plus the management fee.