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Laxman Pai, Opalesque Asia: A study uncovered what investors are actually paying versus managers' published fee schedules along with a reflection on 2018 fee trends across various asset classes and mandate sizes in active and passive management.
The Institutional investment consulting firm Callan's 2019 Investment Management Fee Study centers on traditional institutional mandates, providing insight into what institutional investors are actually paying (negotiated fees) versus investment managers' published fee schedules.
According to the study, 98% of total fees paid were to active managers and 50% of total fees go to less than 10% of firms. It also revealed that 70% of assets are managed actively and pricing power remained strongest among private real estate and non-U.S. equity.
The data was collected and curated using Callan's proprietary investment manager database, proprietary client performance reporting database, and actual client fee schedules.
The study reflects trends of 2018 fees representing over $500 billion in assets under management (AUM) and $1.8 billion in total fees paid. The firm's fee database includes more than 350 investment firms and over 165 institutional investors.
"Investment management fees have been a dominant issue post-Global Financial Crisis, and the pressure to lower fees on traditional active management has been relentless," said Ivan "Butch" Cliff, executive vice president and director of research.
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