According to Bloomberg Pacific Investment Management Co., seeking to raise $600 million for a fund that would invest in residential mortgages, agreed to slash its management fee should the fund suffer losses.
Pimco REIT Inc., which filed for an initial public offering in April, disclosed last week that its annual management fee would decline to 1.0 percent from 1.5 percent if the fund loses money over a one-year period. Newport Beach, California-based Pimco’s prior filings with the U.S. Securities and Exchange Commission didn’t call for any change in the fee, which is based on shareholders’ equity.
Pimco and its New York-based rivals Avenue Capital Management and Angelo, Gordon & Co. are among investment firms creating real estate investment trusts, or REITs, that could help provide home loans if government-sponsored enterprises Fannie Mae and Freddie Mac curtail financing. The rush to seize this opportunity is creating a glut of mortgage REITs, forcing some to make concessions to attract capital from institutions….
Find out more at http://www.bloomberg.com/news/2011-07-05/pimco-reit-agrees-to-slash-fee-if-residential-mortgage-fund-loses-money.html
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