Are Peregrine subsidiary's new listing fees justified?
New listing draws flak for high fees and the possibility that shareholders may have to pay twice for the management of assets
Money manager Peregrine’s spin-off Sandown Capital, which will list on the JSE and A2X next week, plans to pay its investment management company at least R16m in yearly management fees. This is despite the fact that more than half of Sandown’s portfolio consists of hedge funds managed by external parties. Analysts have criticised the fee structure, which they say has the potential to allow for "double dipping" (being paid twice for managing the same funds) and is unfair to shareholders. Peregrine — the holding company for a stable of financial services businesses — has transferred its excess cash, hedge fund and proprietary investments to Sandown Capital. Sandown will list as an investment holding company, with a net asset value of around R1.3bn. Hedge funds managed by Peregrine Capital and Electus Fund Managers comprise the bulk of this net asset value at 51%. This isn’t the first time that investment holding companies’ complicated fee structures have raised questions about the ext...
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