Shock absorber fee (SAFe)

SAFe is a performance fee structure for investment funds and banks created by Kirill Ilinski,^{[1 1]} Managing Partner and Chief Investment Officer of Fusion Asset Management LLP.

Mr Ilinski published his working paper on SAFe entitled "Responsible Compensation Structure^{[2 1]}", in March 2010.

Under standard performance fee structures, the fund manager tends to be remunerated if the fund performs well, but does not tend to take a loss if the fund performs badly. SAFe aims to align the interests of the fund investor with the fund manager by creating a structure through which the manager, not the investor, takes the first loss.^{[3 1]}

Mr Ilinski presented SAFe at the International Centre for Financial Regulation (ICFR) on 7 December 2010.^{[4 1]} He discussed SAFe in an interview with Investments and Pensions Europe (IPE), which is cited in the magazine's article "Just Rewards"^{[5 1]}" exploring performance fees.

References

1. Ilinski, Kirill. "Management Team: Kirill Ilinski". Biography. Fusion Asset Management LLP. Retrieved 19 July 2011.

1. Ilinski, Kirill. "Responsible Compensation Structure" (PDF). Working Paper. Fusion Asset Management LLP. Retrieved 19 July 2011.

1. Grene, Sophia. "Hedge Funds Begin To Restructure Fee System". Article. Financial Times. Retrieved 19 July 2011.

1. "Asset Managers: Taking A Longer Term View". Event Summary. International Centre for Financial Regulation. Retrieved 19 July 2011.

1. Steward, Martin. "Just Rewards". Article. Investment and Pensions Europe. Retrieved 19 July 2011.