Electra Private Equity cuts fees

Electra Private Equity cuts fees

Electra Private Equity has become the latest investment trust to alter its fee structure, announcing it will not charge an annual management fee from April 1 onwards.

The £1.2bn investment trust currently charges a fee of 1.5 per cent of gross assets. The board will replace this with a 1 per cent charge for listed investments and primary funds and no levy on cash holdings.

The board said if the change had been implemented last year it would have cost the company £7m.

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There has been an increasing number of investment trusts reviewing their fee structures. Last year 10 per cent of all investment trusts changed their fees, with 12 abolishing performance fees.

The £167.7m JPMorgan Chinese Investment Trust, the £227.3m Pacific Assets Trust and the £725m Fidelity European Values have all culled the fees in the past few weeks.

Electra Private Equity also does not intend to borrow more. On Wednesday it announced plans to return 3 per cent of net asset value per year to shareholders through dividends and buybacks.

At the moment the Company does not pay dividends unless it is required to maintain its investment trust status and has not initiated any share buybacks since 2008.

Roger Yates, chairman of Electra Private Equity, said: “I am pleased that the Board has concluded its review which has rightly involved tough and rigorous negotiations.”