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Exclusive: Mindich's Eton Park cuts fees, creates more liquid share class

Eric Mindich, Founder and CEO of Eton Park Capital Management attends a session at the World Economic Forum (WEF) in Davos January 29, 2010. REUTERS/Christian Hartmann

By Svea Herbst-Bayliss

BOSTON (Reuters) - Eton Park, one of the year's best-performing hedge funds, plans to lower management fees and create a more liquid share class, in a rare change at a fund so popular at its launch that it was able to impose some of the toughest investment conditions in the industry.

The change at Eric Mindich's $10 billion fund would be the latest among hedge funds which insiders say are increasingly agreeing to investor demands for lower fees and easier access to their money.

"The management fee for Eton Park Fund LP and Eton Park Oversees Fund Ltd will be 1.5 percent per annum for all existing share classes" from 2 percent, effective January 1, Eton Park wrote in a letter to clients seen by Reuters.

A spokesman at the hedge fund declined to comment.

The fund also said in the letter it will offer a share class from which investors can pull out their money within four quarters rather than seven.

Eton Park, a multi-strategy hedge fund, stands out for its strong returns this year. Its main fund earned a 17.6 percent return through the middle of November, the letter showed. The average hedge fund has gained about 7 percent whereas the Standard & Poor's 500 index has risen 25 percent.

Last year's return was 12.6 percent for the main portfolio and since January 2012 Eton Park has generated a net return of 32.4 percent - an improvement from 2011 when it was off 11 percent.

Eton Park also told clients that Isaac Corre and Josh Astrof, two members of its U.S. event-oriented strategy team, are leaving.

Corre will pursue academic interests in corporate governance, the fund said in the letter. Astrof, who managed Eton Park's U.S. long/short team, is leaving at the end of the year to "pursue other opportunities" - a phrase which industry analysts say can be shorthand for a manager leaving to launch his own fund.

Bruce Haggerty, who has been an Eton Park partner for two years, will head U.S. fundamental and event-driven equity investments, the fund said.

Mindich has been a huge success story in the $2.5 trillion hedge fund industry for having drummed up so much demand when he set up his fund in 2004 that he raised $3.5 billion at the start. This also allowed him to impose a long lockup of more than two years.

(Reporting by Svea Herbst-Bayliss; Editing by Christopher Cushing)