Orbis Investments to lower investment fee by 10%

Orbis Investments is reducing the fees charged across its UK fund range from 50% of outperformance to 40%, effective 1 June 2022.

The investment firm is taking the opportunity to adjust its “innovative fee structure” to make it more favourable to clients so that clients “will retain a clear majority (60%) of future outperformance generated”.

Currently, Orbis has arranged its fee structure so that it only charge its clients the fee when its funds outperform against their respective benchmarks.

The investment manager also holds the fee in a reserve so that if the funds subsequently underperform it is available to be refunded to clients.

Orbis takes on the ongoing charges of running the funds and fees paid to Orbis from the reserve are capped at 2.5% of AUM.

Dan Brocklebank, director UK at Orbis Investments, said: “To put the 40% in context, we must deliver top quartile performance to receive average fees, and if we perform only in-line with the market, we will be cheaper than a tracker fund.”

Brocklebank added: “We think this is a much fairer approach than most of the industry which typically charges a fee of around 1% of assets under management (AUM), whether performance is good, bad or indifferent.

“This can incentivise firms to focus on growth in AUM above all else. By comparison, our fee structure creates a unique alignment of interest between us and our clients.”

© 2022 funds europe

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