Five per cent commission on Rubicon’s no-fee hedge fund

Fund manager Rubicon claims its new hedge fund of funds won't charge any ongoing fees, and will only charge a fee of 10 per cent on the net gain value. The idea is to guarantee capital protection. However, there are at least three more fees: the commission of more than one per cent paid to advisers; a one per cent establishment fee; and a sort of bonus fee for the manager of 2.6 per cent if Rubicon meets a target of $100 million. In other words, the up-front fees are close to five per cent on a fund with no ongoing fees if the fund fails to make money.

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