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Merrion Investment Managers has reduced the annual management charge on the Merrion European Absolute Return Fund. 

The fee reduction from 1.5 per cent to 0.5 per cent applies to investments over EUR5m made before 31 December 2010.

The lower rate will remain in effect for the duration of the investment and will also apply to any subsequent additional investments in the fund.
 
The fund, which recently announced its first external investor, opened for investment in June 2010 and has grown to USD20m returning 9.5 per cent in the first five months. This figure is in line with the fund’s absolute return target of 15 per cent to 20 per cent per annum with annualised volatility between 7.5 per cent and ten per cent.
 
It is also consistent with the performance of the audited paper portfolio managed by Michael Nicol and Alistair MacDonald during the 18 months prior to launching the fund and the long-term live track record that Nicol has built up managing equity long short portfolios over the last decade.
 
Kevin Gallacher, director, Merrion Investment Managers, says: “The portfolio has delivered genuine alpha and managed to capture a significantly higher proportion of the market return than its net long exposure of 40 to 50 per cent. It has also generated positive absolute returns from the short book in rising markets.
 
“The reduction in AMC is an incentive to institutional investors to invest in a fund where the risk of manager change is reduced by the fact that the portfolio managers have a material share in the business.”


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