NEW YORK (Reuters) – Prominent U.S. investor Jeffrey Vinik is promising potential shoppers a reduce in charges and stated that it had been harder to increase cash than he initially thought, as he prepares to relaunch Vinik Asset Management after six years on the sidelines.
Vinik, who as soon as ran Fidelity’s Magellan mutual fund after which oversaw $10 billion at his personal hedge fund, had hoped to increase as a lot as $three billion in the hedge fund relaunch.
But with just a few days to go earlier than his deliberate March 1 launch, Vinik is each tempering expectations and making an attempt to drum up help shortly in order that he has as a lot cash as attainable to put to work.
“We will offer investors a 50-basis point discount on management fees in our 1/30 and 2/20 tranches,” the fund supervisor wrote in a letter seen by Reuters.
Raising $three billion by March 1 was not possible, he wrote, explaining that his “expectation for the timing of inflows has been too optimistic.”
A spokesman for Vinik declined to remark.
Vinik, 59, stated final month that he was returning to investing for shoppers at a time many rivals are throwing in the towel. He stated he missed competing with the world’s largest institutional buyers and criticized a few of his fellow hedge fund managers for poor efficiency.
But the sluggish returns have weakened investor urge for food for hedge funds. Those who’re nonetheless tempted to make investments are taking extra time to rigorously analysis their decisions, business analysts stated.
That is a transparent change from the heady days of 1996 when Vinik’s popularity created such a buzz that he raised $800 million on the primary day of the unique Vinik Asset Management and closed to new buyers instantly.
Vinik stated in the letter he understood that he had requested institutional buyers to hurry their normal due diligence course of and needed to thank them by providing a “founder’s share class” for the primary $1 billion of out of doors capital raised. These varieties of preparations typically supply decrease charges in return for early commitments.
Even as he offers his fund at a reduction, Vinik stated that he was nonetheless positive it might develop and achieve success.
“We have full confidence in our ability to become a multi-billion dollar long-short equity fund … and provide our investors with great results,” he wrote.
Reporting by Svea Herbst-Bayliss, further reporting by Lawrence Delevingne, Editing by Rosalba O’Brien