Korda Mentha, which was appointed trustee of the LM Managed Performance Fund on 12 April this year, said fees for the period since its appointment to 31 May were A$874,337 (£524k, €607K, $792K) from nearly 2000 hours of work.
The fees are broken down into five “task areas” including: risk management (litigation and legal) & administration, assets, investors, investigations and fund trading & other management.
The most expensive of these categories is risk management & administration for which A$271,673 has been charged to the fund, followed by assets, for which Korda Mentha has charged A$260,000 and investors, for which A$185,000 has been charged.
In addition, Korda Mentha has broken down the fees into each week it has been trustee of the fund. The breakdown shows the most expensive week being the second, for which the company has charged A$193,099.
The fees per week did begin to slow towards the end of the eight week period, with the last two coming in at A$62,447 and A$85,848 respectively.
An appendix to the investor update gives an indication as to why the trustee’s costs have mounted so significantly in a relatively short period of time. Under the terms of the agreement Korda Mentha charges on an hourly basis, with those charges increasing depending on who is doing the work.
A Korda Mentha partner, for example, will cost A$575 an hour (although if based in the Sydney office, an hour of a partner’s time will cost A$625), while at the lowest end, an administrator will cost A$130 an hour. There are ten potential “staff classifications” for which Korda Mentha will charge, at an average cost of A$498 per hour.
In a statement regarding the fees within the update, Korda Mentha said: “Upon the appointment of the trustees there was a requirement to spend a considerable amount of time on litigation which, whilst eventually successful, required extensive resources and expertise.
“The work to date in taking the required steps to understand, investigate and preserve the asset position of the fund was extensive but necessary in view of the circumstances.”
