Australian equities boutique Solaris Investment Management's performance fee-only options have received a good response from retail and institutional investors.
The Brisbane-based manager launched the options for its Core Australian Equity Fund about 10 months ago and in that time retail investors have put $90 million into the performance fee-only component out of the $285 million invested.
The performance fee option for retail investors remains available via platforms and direct investment, but it is also subject to capacity constraints.
"That's a pretty reasonable uptake . we're pretty certain we can deliver annual outperformance because the product is pretty painful if you don't," Solaris managing director Denis Donohue said.
The strategy is now on Questor and was recently added to Axa Summit, MLC MasterKey Custom and BT Wrap.
Donohue said the retail market was of particular interest to Solaris.
"You can be quite innovative in the retail market and what we've been quite creative with is a pretty vanilla product," he said.
However, institutional investors have also taken a liking to the product. The performance fee allotment for institutional investors is full with potential clients on a waiting list.
By November last year, $1 billion was gained from institutional investors with the remaining $1 billion of capacity earmarked for retail investors.
The performance fee-only options charge a management fee of 10 basis points and then levy a performance fee of 30 per cent of any returns above the benchmark, the S&P/ASX200 Accumulation Index.
