Hedge fund firm VemaGrowth increases the benchmark fee that portfolio managers can charge clients

VemaGrowth, the oldest hedge fund company of Mount Vema confirmed on Monday that it has reduced the margin of its main corporate fees to enable more flexibility on the fees that its Self-Service Portfolio Managers charge their clients so that fees are only paid in excess of the firm’s benchmark.
 
VemaGrowth client management fee is now 2% per year, however under the firm’s new Self-Service Investments, Portfolio Managers can open an account, manage their own portfolios, and may charge their clients up to 4% per year in management fees.
 
Vema Growth has also on Monday, reduced its fund performance fee from 20% in the fund's net asset value during a year to 15% so Self-Service Portfolio Managers can charge their clients a fund performance fee of up to 30% in their fund's net asset value during a year, as part of the firm’s new open and flexible policy to help Self-Service Portfolio Managers increase their revenues.
 
Generally across the world hedge fund performance fee is typically 20% of the fund's profits during any year, though performance fees can range between 10% and 50%, and are intended to provide an incentive for a manager to generate profits. The fees according to independent reports have been criticized by well-known investors such as Warren Buffett, who believes that because hedge funds share only the profits and not the losses, such fees create an incentive for high-risk investment management.
 
Mount Vema had several hedge funds companies in the past but VemaGrowth which was formed in 2007 is the most successful. Unlike management fees and performance fees, redemption fees are usually kept by the fund and redistributed to all investors.
 
The firm charges a redemption fee (withdrawal fee) for early withdrawals during a specified period of a year, or when withdrawals exceed a predetermined percentage of the original investment. The purpose of the fee is to discourage short-term investing, reduce turnover, and deter withdrawals after periods of poor performance.