(Bloomberg) -- Man Group Plc is starting to charge clients of its nascent multistrategy hedge fund pass-through fees covering compensation and other expenses, a practice favored by peers such as Millennium Management and Citadel.

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Man Group, the world’s biggest publicly traded hedge fund firm, will charge the pass-through fees on new capital invested in Man Strategies 1783 starting this month, according to a filing.

Such fees have become increasingly popular among multistrats, giving them vast resources to hire and recruit traders as well as invest in their technology and infrastructure. Investors are often willing to pay the additional cash as they clamor to sign up with firms staffed by teams of portfolio managers who can produce steady returns.

A spokesperson for London-based Man Group, which oversees about $178 billion, declined to comment.

Man Strategies 1783, named for the year the firm was founded, debuted in 2020. The fund, run by Man Group’s head of Americas, Greg Bond, has since grown to manage $1.5 billion after starting out with $500 million.

The fund can allocate its capital among roughly 70 in-house strategies, including discretionary and computer-driven money pools, according an investor document seen by Bloomberg.

Multistrats generally allocate capital to dozens and even hundreds of semi-independent trading teams, also known as “pods,” making bets in a wide variety of asset classes and markets. Pass-through fees were initially conceived to cover the direct expenses tied to these teams, including their shares of trading gains.

New investors in Man Strategies 1783 will pay pass-through fees covering both performance-based pay and hiring costs, in addition to reduced management and performance fees of 1% of net assets and 15% of profits, respectively.

While Man Group is only passing through compensation costs, other multistrat managers bill their clients for a wider range of expenses, spurring some institutional investors to worry the firms have little incentive to be frugal. Pass-through expenses typically equal 3% to 10% of net assets.

(Updates with initial fund assets in fifth paragraph. An earlier version of this story corrected percentage of management and performance fees in penultimate paragraph.)