Deals
Generali Backs Kraus's Attack on Management Fees with $4 Billion
- Money managers to be paid based mostly on performance at firm
- Plans to shake up current pay model based on assets managed
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Assicurazioni Generali SpA showed its money-management ambitions with a $4 billion bet on a new firm headed by former AllianceBernstein chief Peter Kraus that seeks to turn the industry fee system on its head.
The commitment makes good on Chief Executive Officer Philippe Donnet’s promise to increase the share of earnings Generali gets from asset management. Kraus’s Aperture Investors aims to pay managers based on fund performance rather volume of assets, the companies said on Thursday. Customers will be charged low, ETF-like fees until their fund outperforms its benchmark.