Bobby Jain’s Hedge Fund Set to Make History with Unprecedented Fee Discounts
Former Millennium Management executive, Bobby Jain, is gearing up for the anticipated launch of his new venture, Jain Global. Touted as potentially the most significant debut in hedge fund history, Jain Global is drawing in new clients with attractive discounts on performance fees. Investors willing to commit a minimum of $250 million in April will be charged a performance fee of a mere 10%, a significant drop from the proposed 18% discounted rate last year.
Unprecedented Fee Structure
This offer is not a temporary incentive but a perpetual promise, a move rarely seen in the hedge fund industry. Additionally, Jain Global is introducing an annual redemption right that allows investors to pull out their funds after an 18-month investment period at certain applied fees. This innovative approach is challenging the industry standard of a 2% fee on assets and 20% on gains, a structure being increasingly questioned due to growing competition and investor caution.
Industry Growth Amid Scrutiny
Despite the mounting scrutiny on hedge funds, the industry is witnessing growth in assets, with the largest players bagging most of the new capital. Jain Global is likely to start in July with a potential $10 billion capital, surpassing the $8 billion debut of ExodusPoint Capital Management in 2018.
Building a robust team
Jain has been actively courting investors, including Middle East sovereign-wealth funds, and has managed to build a team of about 50 people, including seven strategy-focused CIOs. By the launch date, Jain plans to have 40 portfolio managers on board, ready to navigate the financial waters.
