The Polar Capital Technology Trust (PCT) announced their interim results this morning. It includes a statement that the Management Fees are being changed and that includes removal of the performance fee. This is to be welcomed as performance fees do not improve performance and just impose additional costs on investors. Managers have sufficient incentives to perform to the best of their ability without adding such fees.
The changes were summarised in the announcement as follows:
Current fee arrangements:
The current base management fee is structured over three tiers:
§ Tier 1: 0.80% on NAV up to and including £2bn
§ Tier 2: 0.70% on NAV between £2bn and £3.5bn
§ Tier 3: 0.60% on NAV above £3.5bn
Performance fee: The performance fee participation rate is 10 per cent. of outperformance above the Benchmark, subject to a cap on the amount which may be paid out in any one year of 1 per cent. of NAV. Further information is provided in note 6 below as well as the Company Annual Report and Accounts for the year ended 30 April 2024.
New fee arrangements:
The new base management fee will be structured over two tiers, and the performance fee will be removed entirely:
§ Tier 1: 0.75% on NAV up to and including £2bn
§ Tier 2: 0.60% on NAV above £2bn
Performance fee: none
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Roger Lawson (Twitter: https://x.com/RogerWLawson )
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Good news!