|Canadian bond market veterans John Schumacher and Mike MacBain, have joined forces to launch a fixed income focused hedge fund manager named East Coast Fund Management Inc. Prior to founding the new firm, John Schumacher was a co-chief executive at Scotia Capital, while Mike MacBain was the head of debt capital markets at RBC Dominion Securities.|
According to the Globe and Mail, the Toronto-based hedge fund manager will charges fees that are significantly lower than the industry standard of 2% and 20%. Initial investors will face no management fees and will only pay 20% performance fees when East Coast’s hedge funds are up more than 4% for the year. Schumacher and MacBain reportedly chose the 4% mark because they believe that 4% should be attainable without the expertise of a hedge fund manager.
Following the firm’s initial fundraising period, which is set to end on July 1st, East Coast Fund Management is planning to charge new investors a modest management fee that will be below 2%. According to the article, the firm’s “founders fund” returned over 30 percent during the past 12 months.