Literacy Capital (BOOK), a private equity fund, has announced a significant increase in management fees while reducing its charitable contributions. Starting January, the £314 million trust will pay Book Asset Management, led by Paul Pindar and his son Richard, a fee of 1.5% of net assets annually, up from the previous 0.9% established at its listing three years ago.

The decision to raise fees was made to ensure that the investment manager has adequate resources to support a portfolio of 19 smaller UK businesses. These businesses require more intensive management compared to the typical holdings of other private equity funds, according to the company.

In conjunction with the fee increase, Literacy Capital will also cut the percentage of its profits donated to the Bookmark Reading Charity. This move has raised concerns among stakeholders about the balance between profit generation and social responsibility.

The changes reflect a strategic shift in how Literacy Capital plans to manage its investments and support its portfolio companies. The firm aims to enhance its operational capabilities to better serve its investments, which are seen as needing more hands-on management.

Overall, this decision highlights the ongoing challenges private equity firms face in balancing financial performance with their commitments to social causes.