UK Government Considering Relaxing Fee Cap on AUM

If the change goes through, plans will have more freedom to invest in lucrative private equity and venture capital.


Almost every institutional investor knows the struggle of balancing expensive asset management fees with the potential of missing out on gains due to investing too passively. Different boards and governments have dealt with this issue in their own way, but the UK has taken a unique approach.

In April 2015, the country put a 0.75% cap on fees for UK residents who are automatically enrolled in a defined contribution (DC) pension by their employers. Pension contributors can opt in to a plan with higher management fees if they choose, but the default is the simplest option for many participants.

This cap hasn’t sat too well with asset managers, however, according to the Productive Finance Working Group, a panel co-chaired by the Bank of England, the UK’s Treasury, and financial regulators. Many asset managers believe they are missing out on significant private equity and venture capital gains, which often demand higher fees. Government officials are especially worried that staying out of private equity will prevent investments in a greener economy.

Given these concerns, this past Tuesday, the UK government proposed allowing well-designed performance fees to be exempt from the 0.75% cap requirement, according to the Financial Times.

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The move has the potential to put billions of dollars into private equity investments. It would be part of a growing trend of pensions looking into alternative investments in the wake of an unprecedented year of large returns. In 2021, private equity broke records for multiple pensions in the United States and was the top-performing asset in many portfolios.

While the exact definition of a “well-designed performance fee” is not yet clear, it will likely mean pensions will not pay a fee unless the funds they invest in perform significantly well.

The government says it plans on consulting with members of the industry until Jan. 18, before it makes any final decisions regarding the regulatory cap. Those interested in providing feedback to the government can find further information about the program here. The consultation is specifically aimed at pension plan managers, trustees, members, beneficiaries, and industry professionals. Other stakeholders in the issue are welcome to request to be a part of the consultation program, as well.

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Crypto Promoter Charged With Scamming Investors Out of Millions

The SEC alleges Ryan Ginster promised ‘astronomical’ returns of 8% per day.


The US Securities and Exchange Commission (SEC) has charged a California-based cryptocurrency promoter with conducting two unregistered and fraudulent securities offerings that promised “astronomical rates of return” through purported trading and advertising arbitrage. 

According to the SEC’s complaint, Ryan Ginster, 34, raised $3.6 million in Bitcoin from the offerings through online platforms MyMicroProfits.com and Social Profimatic and allegedly lied to investors in both offerings about how their funds would be used.

The SEC further accused Ginster—who also went by the alias Ryan Oakley—of misappropriating at least $1 million of the funds he raised to pay for personal expenses, such as tax payments, mortgage payments, a luxury vehicle, and almost $200,000 in various credit card bills.

“Ginster allegedly engaged in a fraudulent scheme raising millions in cryptocurrency using online investment programs and then converted the cryptocurrency for his own benefit,” Michele Wein Layne, regional director of the SEC’s Los Angeles regional office, said in a statement. “Individuals who hide behind the anonymity of cryptocurrency transactions to defraud investors should expect that the SEC will trace their illegal activity and hold them accountable for their actions.”

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In the Social Profimatic offering, Ginster allegedly raised approximately $840,000 in Bitcoin by promising on both the platform’s website and in YouTube videos returns of 8% a day, which, according to the SEC, corresponds to an annual rate of return of nearly 1,600,000,000,000%.

The complaint said the Social Profimatic website claimed that investors “choose how much you wish to deposit with us & we’ll pay you 8% every day. Our system will divide your revenue share payments up by the hour so you receive INSTANT and AUTOMATIC payments each hour. After you have your deposit made, we start creating & fulfilling social media marketing orders behind the scenes day & night on your behalf!”

However, the SEC alleges that once investors’ funds were received, Ginster transferred the money to at least five digital asset wallets under his control and converted it to fiat currency to pay his personal expenses. The regulator said there was no indication Ginster ever attempted to generate returns through social media marketing orders as promised.

Under the MyMicroProfits.com offering, Ginster raised nearly $2.8 million in Bitcoin on promised returns of 0.13% per hour, or 3.12% per day. By the SEC’s calculations, that would mean a $10 investment be worth almost $45,000 after just nine months. Ginster claimed he would do this by investing in micro profit opportunities such as “transaction processing fees, cloud hosting, cryptocurrency trading, and advertising arbitrage.” As with the previous offering, the SEC said there was no evidence Ginster ever attempted to generate returns through transaction processing fees, cloud hosting, cryptocurrency trading, and advertising arbitrage.

The complaint also alleges that despite promises by both platforms that investors’ returns could be easily withdrawn, investors were not able to withdraw their funds.

The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties against Ginster.

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