Hedge Fund Qube Starts Charging Some Staff 35% Incentive Fees

(Bloomberg) -- Qube Research & Technologies has started charging performance fees on investments made by some of its own employees in the firm’s hedge funds, aligning them with what clients pay.

Investments by some staff have been switched to performance-fee paying investor share classes effective Aug. 1, according to people with knowledge of the matter. The change means that those employees will be charged between 25% and 35% incentive fees depending on the funds in which their cash has been parked, the people said, asking not to be identified because the details are private. 

The decision affects personnel in Singapore and less than 5% of Qube’s employees worldwide, one of the people added. The firm’s flagship Qube Fund, the crypto-focused Moebius and China-focused Dao money pools, each charge 35% incentive fees. Torus levies 30%, while Prism collects 25%. All internal and external investors also pay pass-through expenses.

A representative for London-based Qube, which employs about 2,000 people, declined to comment.

Multistrategy hedge funds such as Qube, where dozens of traders invest across asset classes, typically incentivize their staff by allowing them to invest certain part of their remunerations into in-house money pools so that they can profit from the firm’s capabilities. As many of the largest hedge funds are closed to new money, they present such opportunities as important perks while hiring and trying to retain staff. 

The firm’s main Qube and Torus hedge funds are up more than 15% this year, while Prism has recovered losses from earlier this year and is positive, one of the people said.

The firm was originally spun out of Credit Suisse at the start of 2018 with $800 million in capital and a focus on quantitative trading. It has since rapidly grown into a multistrategy giant that manages multiple money pools totaling more than $36 billion. It has backed external traders and raised new cash this year.

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