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Alternative Market Briefing

Value investor Guy Spier looks to emerging market and commodity stories for opportunities

Friday, October 22, 2010

From Kirsten Bischoff, Opalesque New York:

The principles of value investing are so intrinsic to the way Swiss-based firm Aquamarine Capital approaches business that Managing Partner Guy Spier allows his investors to participate in the fund at fee structures based not according to the assets under management, but rather on the value of the performance. According to the firm's website, "Returns above 6% are split in a 3:1 ratio between Limited Partners and the Managing Partner after fund expenses."

In an industry plagued by criticism over fee structures that have a tendency to reward high risk trading, Spier's bold move to collect fees only on alpha generation is one that has been discussed by many and implemented by few.

"...That seems to me to be a much better alignment of interests, between the manager and his investors than a standard 1 and 20 or 2 and 20, whereby the manager could be incentivized to simply gather assets," he explains to Opalesque's Matthias Knab during a recent interview on Opalesque TV.

Spier actually changed from the more prevalent 2/20 to the current fee structure in advance of his much-publicized lunch with Warren Buffett.

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