30%
Performance-Linked Fee
Why We’re Different
We believe in a simple but powerful premise: it is the job of active managers to produce outperformance, and clients should only pay for outperformance when they get it.
Most firms charge fixed fees as a percent of assets, so the percent fee is the same whether your investment increases or decreases in value, or whether the manager out / under-performs the benchmark. Great for asset managers but not for clients. And given that most managers don’t consistently beat their benchmarks,1 it’s understandable that investor trust in active managers is waning.
That’s why we believe in performance-linked fees. All Aperture strategies utilize performance-linked fee structures. Each strategy charges a fee competitive with that of comparable passive ETFs if performance is at or below its stated benchmark. As outperformance is generated, each strategy is charged a performance-linked fee of 30% on returns generated in excess of the stated benchmark.2 At right is a a hypothetical strategy charging a minimum fee of 0.50%. For example, with 0% outperformance, an investment of $100 would be charged a $0.50 fee ($100 x 0.50%). With 1% outperformance, that same investment could be charged a fee of $0.80 ($100 x 0.50% = $0.50, plus the performance-linked component, $1 x 30% = $0.30). If your investment was $10,000, and the outperformance was 1.5%, the fee would be 0.95% = $95; however if the outperformance was 4% the fee would be 1.7% = $170.3
1. SPIVA 2019 Year-End Scorecard, S&P Global. 2. The fee and benchmark will be adjusted to reflect the impact of share class hedging and distribution fees, where applicable. 3. This is an illustrative example only. Fee and performance calculations occur daily and actual outcomes over an entire year will depend on average assets over the course of the year, capital inflows / outflows, when the investor enters / exits the fund, and other factors.
See How it Works
Drag the slider to see our fee change under different scenarios.
Hypothetical Outperformance
Total Fee (incl. expenses)
Important information: Investments involve risks. Past performance is not a reliable indicator of future performance and can be misleading. There can be no assurance that an investment objective will be achieved or that there will be a return on capital. You may not get back the amount initially invested. Before taking any investment decision, please always read the associated legal documents. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index. Outperformance is defined as the difference between the return of the Fund and the return of the Fund’s stated benchmark.2
Total Potential Investment Team Performance Payout
x
35%
Investment Team Share
=
10.5%
Deferral and Clawback of Performance Compensation
Example 1: 66% Payout
+
3%
Outperformance
Year 1
Year 1
+
0%
Outperformance
Year 2
Year 2
-1%
Outperformance
Year 3
Year 3
+
2%
Earned Share of Deferred Compensation
66% of 3%
66% of 3%
For illustrative purposes only
Example 2: 100% Payout
+
3%
Outperformance
Year 1
Year 1
-3%
Outperformance
Year 2
Year 2
+
3%
Outperformance
Year 3
Year 3
+
3%
Earned Share of Deferred Compensation
100% of 3%
100% of 3%
For illustrative purposes only
Aperture is all about alignment, which is why the compensation of our investment teams is designed to put client results first, with an emphasis on consistent outperformance.
Base Compensation Aperture investment teams receive modest base salaries according to industry data.4
Performance Compensation Fully-seeded investment teams can earn up to 35% of performance-linked fees charged to the strategy (30% of performance in excess of the benchmark). Half of performance compensation is deferred and requires consistent performance over 3-year periods to be earned in full.
Deferral and Clawback The deferral structure applied to Aperture’s platform strategies is designed to incentivise long-term performance. Half of performance compensation is paid out on the past year’s performance. The other half is paid on cumulative outperformance over a 3-year period, including the following two years. The investment team’s cumulative outperformance over that 3-year period must be at least as great as the outperformance in the first year in order to earn all deferred comp. Deferred compensation is decreased pro-rata by any underperformance. Unearned compensation is returned to the strategy over time.
4. We compared our typical investment team professional’s base compensation to the salaries of people with the titles “Chief Investment Officer” and “Senior Portfolio Manager” in the Greater London, United Kingdom area using LinkedIn Salary, which bases its estimates on information voluntarily provided by members and employers as of Aug 15, 2018.
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