Asset management fees for most non-traditional asset classes have fallen following increased scrutiny from cost-conscious investors, according to a report by Mercer released Thursday. In particular, fees for hedge funds, private equity, infrastructure and real estate have all decreased. Fees for traditional asset classes have varied, with some increases observed in long-only equity and fixed income strategies.
Mercer’s 2010 Asset Manager Fee Survey is a bi-annual report analyzing fee data of 20,000 asset management products from over 4,000 investment management firms. The survey covers asset managers in a range of geographies and across numerous products including pooled and separately managed accounts. According to Mercer, the study is intended for use as a reference when assessing asset management fees.
"The impact of the financial crisis continues to be felt by companies and investors,” Divyesh Hindocha, global director of consulting for Mercer’s investment consulting business, said in a statement. “Although not universal, subdued investment returns have taken the edge off many alternative asset products. Combined with an increased focus on operational costs this trend has put growing pressure on asset managers to reduce the complexity of their products and lower their fees in the pricey alternatives arena.
"We believe there is room for further simplification and larger reductions in the overall fees charged by asset managers," he added.
Traditional Asset Classes