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