Active investment manager Allianz Global Investors (AllianzGI) has launched the AllianzGI PerformanceFee Fund suite of products offering a performance fee structure in which the management fee goes to zero if the funds don’t beat their benchmarks over a rolling 12 month performance period.
As the second longest bull market run in history continues, investors have relied on passive investment strategies for easy access to beta. With stretched equity market valuations and a rising rate environment on the horizon, investors will need to look at active management to generate alpha to reach their investment goals – but active at an attractive price.
The AllianzGI PerformanceFee Fund series offers an innovative performance-based structure that utilises a fulcrum fee. While fulcrum fees are not new in the US – they have been used by open-end funds for decades – the AllianzGI suite of funds sets itself apart in that the minimum management fee goes to zero if the funds don’t outperform their benchmark over the performance period. These products bring an established institutional fee structure to the retail market.
“Investors are demanding a new value proposition from active managers that proves their ability to deliver returns above the benchmark,” says Douglas Eu (pictured), CEO US for AllianzGI. “We are confronting this challenge with a shared value approach that puts clients first and more closely aligns our fees with outperformance.”
The new PerformanceFee suite includes three outcome-oriented funds seeking to address multiple investor needs. The funds – AllianzGI PerformanceFee Structured US Equity, AllianzGI PerformanceFee Structured US Fixed Income Fund and the AllianzGI PerformanceFee Managed Futures Strategy Fund – offer access to Core Equity, Fixed Income and Absolute Return categories respectively.
