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MANAGEMENT CHARGES
BY INVESTMENT SECTOR
Splitting down the charges by sector, on
average Media has the highest initial fee at
4.75% but one of the lowest AMC’s at 1.67%,
Technology also has a very high initial fee
of 4.71% on average, but the lowest AMC at
1.66%.
The high initial fees for these two sectors
could be due to the large amount of in-
depth research and due diligence that is
required upfront when searching for and
assessing investment opportunities.
On the other hand energy has the lowest
initial fees at 3.69% but one of the highest
AMC’s at 1.95%. Energy projects can
often be income producing and therefore
managers may look to take their fees
through a higher AMC paid for from income
rather than taking a large fee upfront.
Looking at performance fees, the food
and drink sector actually has the highest
average performance fee with 25% taken
from all profits. The lowest average
performance fee is actually seen in the
Technology sector, which is surprising as
this is a high growth focused sector and
therefore it would be envisaged that profits
would be highly rewarded. We don’t have
an explanation for this apparent anomaly!
Across the remaining sectors the
average performance fee is 20-
22.5% of all profits which is relatively
similar to the market average.
MANAGED FUND/PORTFOLIO
INITIAL FEE BY SECTOR
ANNUAL MANAGEMENT CHARGE BY SECTOR (AMC)
Initial
Fee AMC Performance Fee
Low 1.00% 0.50% 10% above 105p
High 6.50% 3.00% 25% of all profits
Average 4.30% 1.82% 20% of all profits
“High charges are one of the main criticisms associated with
EIS investments”
(2002-2014)
(2002-2014)
