So this fall, when a proxy from Janus showed up in the mailbox, it promptly hit the shredder. But a few weeks later, a second proxy showed up. That's unusual, I thought, but it too hit the shredder. Then a third proxy came. OK, what's the deal?
Shareholders in Janus mutual funds are set to vote at a Dec. 29 meeting on a proposal that would attach performance fees to 13 of its 59 stock and bond funds.Most hedge funds are set up in a similar manner, where the management fees tick up if performance is above a specified benchmark but this is new for the mutual fund industry. Only about 4% of all mutual funds are set up this way, according to Lipper.
Janus Capital Group Inc. originally had intended to put the proposal to a shareholder vote last month but postponed those plans after failing to get enough shareholders to cast a vote one way or the other.
If the proposal is approved, about $25 billion of the Denver-based company's $139 billion in assets will be linked to performance.
Proponents believe that this kind of structure more effectively aligns the objectives of the fund management with investors. I think we'll be hearing a lot more about it.