Citadel Loosening Lockups, Considering Cutting Fees To Lure New Investors

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Does a mere two and a half years to get out and 3&30 sound like something you'd be interested in?

Investors in the Chicago-based firm's Kensington and Wellington funds can now take out 10 percent of assets every quarter, meaning they can aexit the funds entirely over two and a half years, according to people familiar with the matter. Currently, the client withdrawls are limited to one-sixteenth every quarter, requiring four years to get out.

Citadel, which has see its assets under management fall by almost half since a 2007 peak of $21 billion, is trying to win clients by relaxing investor terms, which are among the most restrictive in the industry...Citadel has told investors it is considering changing its fees. It is among a handful of funds that pass along all expenses to clients rather than charging the industry-standard 2 percent annual management fee. Expenses at the firm have reached as much as 8 percent of assets and typically range from 4 to 6 percent. The firm has told potential investors it may change its fees to 3 percent of assets and raise its percentage of profits to 30 percent.

[Bloomberg Brief]

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