Renaissance Institutional Management is reducing the fees and adding an institutional feeder fund to the Renaissance Institutional Equities Fund, its $4 billion quantitatively managed equity hedge fund.
According to a source with knowledge of Renaissance's plans who asked not to be identified, effective Jan. 1, fees for the fund's most popular share class, Series B, will drop to a 0.35% management fee from 0.50% and the net performance fee will remain at 10%.
The management fee for the Series A share class will drop to 1.5% from 2% and Renaissance will continue to waive the performance fee.
A new Series C share class will not charge a management fee and will impose a charge of 25% of the alpha generated by the fund (net performance minus 0.4%).
Renaissance also is adding a feeder fund — the Strategic Partners Fund — to RIEF for institutional investors. Pension funds, endowments, foundations and large family offices with at least $500 million in total assets will be permitted to invest a minimum of $100 million in the new feeder fund, the source said. New clients may make an initial minimum investment of $50 million and have 12 months to invest the remaining $50 million. Existing institutional investors in RIEF's other share classes that meet the criteria may invest $25 million initially and have up to three years to top up the investment to $100 million.
The source said one big change for investors in the Strategic Partners Fund is that Renaissance, which has been very secretive about the investments of its three hedge funds, will offer full portfolio transparency to investors at the midpoint of every quarter with a one-month lag.
Strategic Partners Series A charges a management fee of 1.25% and no performance fee; Series B charges a 0.2% management fee and 10% of net performance; and Series C does not charge a management fee and its performance fee is 22% of alpha generated (net performance minus 0.4%).
Jonathan Gasthalter, a Renaissance spokesman, declined to comment.