The board of Richard Buxton’s £216m Schroder UK growth investment trust has revamped the fee structure, axing its 10 per cent performance fee following a long period of outperformance.
The board says: “The performance fee was introduced in order to incentivise the manager in view of the relatively low base fee.”
It added: “However, the board feels that the performance fee structure adds a layer of unnecessary complexity to the management fee arrangements, and does not necessarily help to align the interests of the manager with those of shareholders.”
The board introduced the performance fee in 1999 to improve returns for investors but a change in strategy in 2006 saw an improvement in the trust’s performance prompting the board to review the fee’s paid to the manager.
The board has decided to raise the base management fee from 0.4 to 0.65 per cent as part of the move.