The board of the trust believes the new rules banning commission-based financial advice could have a significant impact on the demand for closed-end products because open-ended commission-paying products have traditionally been favoured by financial advisers.
In view of this, the board reviewed the management fee arrangements of the trust in order to make the investment company more attractive to a wider audience of retail investors.
Subsequently, with effect from 1 July 2013, the performance fee element of the management arrangements has been removed.
Prior to the changes the base management fee was calculated at an annual rate of 0.365% of net assets, reducing to 0.35% on the balance of net assets above £1bn. This fee remains now.
Meanwhile, the performance fee, which was payable annually for outperformance against the company’s benchmark over a three-year rolling basis will no longer be paid.
This fee was subject to a hurdle rate of 15% so the manager was not rewarded for average performance.
This meant it was only paid if the company’s NAV total return was at least 15% better than the sector and was 15% of the cash value of the outperformance above the hurdle rate, subject to a cap on total fees paid in any one year of 0.55% of average net assets.
Curtis last achieved the performance fee on 30June 2010 and was awarded £75,000, according to a spokesperson for Henderson.