Overview
Electra Private Equity has published the results of the review of the company’s structure that was promised after it defeated Sherborne’s proposals. The plan is to cut the management fee from 1.5% to 1%, leave the performance incentives intact and remove all the currency hedging – which will effectively reduce Electra’s cash pile and cut its gearing but will leave the asset value more vulnerable to swings in currencies. In future, no fee will be charged on cash held by the company. Also, they will institute a regular distribution of 3% of the company’s net asset value each year by way of dividend and /or share buy-backs.
Broadly, this looks like good news for shareholders but the removal of the currency hedging may cause concern in some quarters.
ELTA : Electra announces results of review and cuts fees
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