At Lingren Larsen Kapital, we believe that competitive returns begin with the cost structure. Therefore, we focus on maintaining an effective cost structure. We achieve this by avoiding costs that are considered "nice-to-have" and only incurring expenses that are deemed "need-to-have." Our shareholder agreement stipulates that fixed costs must not exceed 0.35% of the beginning equity, unless approved by the board. Fixed costs encompass all expenses that are not performance-based, taxes, or related to investments. We strive to ensure that our costs never reach this threshold. Over the long term, we anticipate that our costs will grow at a slower pace than our equity, resulting in a decline in fixed costs as a percentage of equity over time. This means that the economies of scale that our company achieves benefit all of our partners.
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It is important for us to stand together with our investors. We win together and we lose together. Therefore, the manager only receives payment if the investors have also earned an acceptable return. A performance fee of 20% of the profits is paid to Class-A shareholders when the profits exceed the highest of either 1) a hurdle rate of 6% or 2) the return required to reach the company's equity peak on any other status day since its inception. Profits are calculated as the difference in equity between status days. The status day is December 31st.
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Acquiring shares in the company is free, whether they are obtained from investors or through a capital increase. However, if one wishes to sell shares, a fee of 0.10% is applied. If one sells within 3 years of original investment, a fee of 1.50% is applied.​