Asset management fees for hedge funds, private equity, infrastructure and real estate have all fallen in both pooled and separately managed accounts, according to the
Flatter returns have put pressure on managers to simplify these complex products and lower costs.
“We believe there is room for further simplification and larger reductions in the overall fees charged by asset managers,” Divyesh Hindocha, Global Director of Consulting for Mercer’s Investment Consulting business, said in a press release.
Since 2008, hedge fund fees have fallen annually 3.2% on average and U.S. real estate fund fees have fallen 4.5%.
Some categories that increased their fees during this period include Global Equity, up 2.8% and U.S. mid-caps, up 1.8%.
With an average fee of 0.68% pooled funds are still more expensive at all sizes than those that are separately managed. While average fees for funds of $25 million fell, funds between $100 and $200 million are charging a little more. Segregated fees increased by on average 0.7 basis points, with the larger pools increasing by slightly more.
