Why Exit Fees Go Back Into the Fund

Investor Knowledge

Why Exit Fees Go Back Into the Fund

Wholesale 1 PIE Trust Returns

As at April 30, 2025

53.27

%

Total Cumulative Return Since Inception is the compounded monthly, distributions after deductions for all charges before tax (Investor PIR = 0%) since the establishment of this fund. Returns are re-invested in this scenario (time-weighted return). Past performance is not a guarantee of future performance. The fund was established 30 June 2022 and made its first investments in September 2022.

25 Feb

We’ve clarified our approach: any exit fees payable are reinvested into the Merx Wholesale 1 PIE Trust — not paid to management. Here’s why that matters.

Author

Andrew
Dunning

After our first year in operation, in late 2023 we made changes to the establishment documents of the Merx Wholesale 1 PIE Trust to provide greater clarity on the treatment of exit fees. The documents now state clearly that exit fees, if payable, will be contributed back into the fund – not to us as managers.

Here’s our rationale.

Exit fees explained

Exit fees are a common feature in investment funds, generally payable to help manage the impact of short-notice withdrawals on the remaining investors. For the Merx Wholesale 1 PIE Trust, an exit fee of 2.5% of the withdrawal amount is payable if withdrawals are made with less than six-months’ notice.

Why direct exit fees back to the Fund?

Our recent clarification is about where these exit fees go. Unlike some funds where exit (or even entry) fees may end up as additional revenue for the managers, we have taken a different approach. If payable, exit fees are contributed back into the fund itself.

As always, our goal has been to simplify.

Early withdrawals pose a risk and inconvenience to other investors in the fund; they can create a drag on the fund’s overall performance – therefore, investor returns. By directing fees back to the fund, we can balance the fund’s liquidity with the flexibility for investors to exit.

This decision reflects our core principle of shared risks and rewards amongst all investors, including us as managers. Once again, it’s about building the fund we want to be a part of – a fund that’s committed to fairness, transparency, and alignment of interests.

Like to join us on this journey?

Click here to learn more or give us a call on 09 215 9364 to discuss further. We look forward to hearing from you.

Note: This article is intended to provide general information and does not constitute financial advice. We recommend you speak with a financial adviser for advice tailored to your individual circumstances. Potential investors with Merx must qualify as Wholesale Investors as that term is defined in sections 3(2)(a) – (c) or 3(3)(a) of Schedule 1 of the Financial Markets Conduct Act (“FMCA”). The Trust is not suitable for retail investors.