IM Global Partner Lists on the London Stock Exchange the First European Active ETF with a Performance Fee

Why It Matters

Introducing a performance‑fee structure to a European ETF blurs the line between traditional funds and hedge funds, offering investors hedge‑style upside with daily liquidity and potentially reshaping fee expectations across the continent’s asset‑management industry.

Key Takeaways

• iMGP Sirios Absolute Return Fund charges 20% performance fee, first in Europe
• TER 1.20%: 1% management fee plus performance component
• Net equity exposure ranges –50% to +50%, target below 30%
• Sirios Capital manages $765 million, 28 staff, 21‑year analyst average
• ETF trend: DBi, L&G, Saba launch similar hedge‑fund products

Pulse Analysis

The iMGP Sirios Absolute Return Fund breaks new ground by embedding a 20% performance fee within a UCITS‑compliant, daily‑liquid ETF—a pricing model traditionally reserved for hedge funds and private equity. This move signals regulators’ growing comfort with more sophisticated fee structures in Europe, while offering investors a familiar, exchange‑traded vehicle that can capture excess returns without the typical lock‑up periods associated with alternative assets.

Strategically, the fund blends long and short positions across six sectors, maintaining a flexible net equity exposure that can swing from –50% to +50% but is capped at a 30% net target. Managed by Sirios Capital, a Boston‑based firm overseeing roughly $765 million, the strategy leans on deep sector expertise—averaging 21 years per analyst—to drive bottom‑up stock selection. The multi‑boutique model of iMGP, which acquires minority stakes in specialist managers, adds a layer of diversification and aligns interests between the platform and its partners, potentially enhancing long‑term performance for European investors seeking hedge‑fund‑like returns.

The launch arrives amid elevated equity valuations and a bond market that often mirrors stock movements, underscoring demand for products that can navigate such environments. Following pioneers like DBi, L&G, and Saba, more firms—including BNP Paribas, Man Group, and Ossiam—are slated to introduce similar hedge‑fund‑style ETFs through 2026. As performance‑fee ETFs gain traction, the industry may see a recalibration of fee benchmarks, compelling traditional index funds to justify their lower‑cost structures while offering investors a broader palette of risk‑adjusted return options.