Conversus Capital, the largest publicly traded portfolio of third party private equity funds, has reduced the management fees it pays to Conversus Asset Management (CAM), the manager of the firm’s investment portfolio.
The Conversus Independent Board of Directors has accepted CAM`s proposal to reduce its aggregate management fees by approximately 20% while the company operates under its recently announced realization strategy, which is designed to increase the confidence of investors that the value of the current portfolio will be delivered to its unit holders over time. This reduction is effective retroactively to July 1, 2009 and will result in annual savings to the company of approximately USD4.3 million based on current asset levels.
The fee reduction has the full support of Conversus` sponsors, Bank of America Merrill Lynch and Oak Hill Investment Management, as well as its strategic investors, the California Public Employees Retirement System and Harvard Management Company, Inc.
"This fee reduction represents another example of how Conversus makes industry leading decisions that are in the best interest of the Company`s unit holders," said Tim Smith (pictured), Chief Financial Officer of Conversus. "We believe the fee reduction and our realization strategy demonstrate the strong alignment of interests built into Conversus` structure."
As previously announced, Conversus will discuss its financial results for the nine months and quarter ended September 30, 2009 on a conference call scheduled for October 26, 2009. The Company will also provide further details on the fee reduction at that time.