(Bloomberg) -- ExodusPoint Capital Management is giving clients the chance to pay no performance fee if its fund doesn’t fare better than three-month Treasuries over the course of a year.
Michael Gelband’s firm said it would offer a new share class to investors in exchange for locking up their money for longer, according to people familiar with the matter. A spokesman for ExodusPoint declined to comment.
The firm has struggled to produce returns as high as some of its other multimanager peers, including Citadel and Balyasny Asset Management. ExodusPoint has been hit by withdrawals in the past two years, prompting it to accept new investments. It raised $1 billion in 2023, mitigating the outflows.
The move follows an open letter from about two dozen institutional investors, including pensions, endowments and sovereign wealth funds, asking hedge funds to forgo incentive fees until they generate returns that beat three-month Treasuries, which now yield about 5%, to better align the firms’ interests with those of their clients.
The Teacher Retirement System of Texas, which led that effort, is also an investor in ExodusPoint, according to the Wall Street Journal, which reported on the new share class earlier Tuesday.
ExodusPoint, which oversees $11 billion, returned 4.6% this year through August. Citadel gained 9.9% and Balyasny climbed 6%.
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