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Schonfeld to introduce ‘longer for lower’ fee structure

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Schonfeld Strategic Advisors is looking to persuade clients to lock up their investments with the firm for longer by offering a hefty discount on fees for its flagship equity hedge fund, according to a report by Bloomberg.

Schonfeld joins a growing list of multi-strategy firms including Millennium Management, Citadel, and Balyasny Asse Management, offering fee discounts in return for longer lock-ups, which in Schonfeld’s case would mean investors waiting as long as two years to withdraw all of their capital from the Schonfeld Fundamental Equity Fund clients.

The reports cites an unnamed source as revealing that under the new terms which take effect on 1 October, the funds investors will only be able to withdraw 25% of invested capital every quarter once their one-year lock-in period expires.

In return, Schonfeld will charge a performance fee of 7.5% under instead of the usual 15%, while a second option waives the lock-in if clients opt in before the effective date, but for a 10% fee.

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