Tuesday, 29 July 2014
Last updated 15 hours ago
Jun 17 2008 | 9:57am ET
London-based BlueBay Asset Management warned that it will miss analyst expectations due to weak hedge fund performance.
The news that BlueBay’s fiscal-year pre-tax profits will be “broadly similar” to last year’s £51.6 million (US$101 million), rather than the expected £59.9 million (US$117.2 million) sent the specialist bond fund manager’s shares down almost 15%.
Performance fees, which may be down by more than half, are the key culprits in the firm’s disappointing results. BlueBay said it has collected only £4 million (US$7.8 million) in such fees during the second half, leaving it with just £22.7 million (US$44.4 million) with less than a month left in its fiscal year. Last year, it earned more than £48 million (US$93.9 million) in performance fees.
BlueBay also said it had agreed to slash the fees on its US$2.7 billion Value Recovery Fund in exchange for a one-year lockup. Under the deal, the performance fee on the struggling fund will be cut from 20% to 15%, and the management fee to 1% from 2%, for 30 months. More than 80% of the fund’s investors agreed to the new terms, which prevent them from pulling their money before next July.
The news was not all bad for BlueBay: Assets under management are growing faster than expected; the firm added £3.5 billion (US$6.8 billion) since the beginning of the year, mostly in its long-only products.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…