While the debate about complicated fee structures and transparency is dominating many conversations in the industry, Quartet Capital Partners’ founder and managing partner is not afraid to take a stance.
‘We have 15 different fee structures and we could have more,’ former cover star Colin McInnes (pictured) said.
‘We want Quartet to be profitable and we are not a charity.’
The Richmond-based multi-asset manager, which will celebrate its 10th birthday next year, currently offers five bespoke portfolio services and charges in three ways, resulting in 15 different fee levels dependent on client preference, portfolio size or other factors.
Annual management charges (AMC) typically range from 0.6% to 0.9% depending on asset size, McInnes said.
‘There are different rates for various clients, so someone may be on a 0.9% AMC and another on 0.75%.’
Quartet also offers the option of lower AMC charges, with the addition of a performance fee over a hurdle rate, for example, 10% of the performance above a flat 5%.
A flat fee per annum was also recently introduced. This is ‘for either a bespoke portfolio or per bespoke model, where we run a bespoke MPS solution [for external clients]’, according to McInnes.
With £400 million in assets under management (AUM), Quartet has been consistently profitable in recent years. However, it made just £15 for the year to May 2018, as additional compliance costs on new obligations under Mifid II increased expenditure by £130,000 on the previous year.
McInnes, who launched the business after exiting Berry Asset Management in 2009, said assets have doubled in the past couple of years and that, while the majority of portfolios range between £250,000 and £1.5 million, the recent average portfolio win is £1 million.
‘When you are small and don’t have a big brand name, you have to work a lot harder,’ he said.
‘We are not in the market to be sold. I’m in my mid-40s and not looking for a liquidity event, but rather would be keen to buy if the right firm came along.’
He added that Quartet is approached by some firms each year, but he is not in any hurry to rush into an acquisition.
‘You are buying people, not AUM,’ he said, ‘so it’s all about the culture.’