Schumacher MacBain Hedge Fund
Bankers, Shumacher and MacBain, Start Cheap Hedge Fund
Two Canadian bond market veterans are launching a low-cost hedge fund. This is important because as the hedge fund industry recovered in 2009 from its recession-losses many hedge funds felt that lowering fees was not as necessary as limited partners had argued during the tough years. But John Schumacher, former co-chief of Scotia Capital, and Mike MacBain, former head of debt capital markets at RBC Dominion Securities, are launching a hedge fund that will charge fees under the 2 and 20 model.
Two of Canada’s bond market veterans are seeking to raise C$100 million ($94.4 million) for a hedge fund that will invest in debt securities while keeping fees below industry benchmarks, the Globe and Mail reported.
John Schumacher, former co-chief of Scotia Capital, and Mike MacBain, former head of debt capital markets at RBC Dominion Securities, plan to generate returns of 8 percent to 12 percent at Toronto-based East Coast Fund Management Inc., the newspaper said today.
The fund’s fees will remain under the industry standard of 2 percent, and a performance fee of 20 percent of any upside will kick in only after the fund has returned at least 4 percent, the Globe said. Source
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