Alternative fees are falling, say Mercer
24 January 2013 London
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Asset management fees in alternatives have fallen due to supply and demand dynamics, according to a report by Mercer.
In particular, asset managers are under pressure to negotiate fees for hedge funds, direct private equity and infrastructure funds.
"Given the plentiful supply of good quality active management, the level and structure of active fees has been remarkably resilient to a slowdown in demand.”
“As we move from a defined benefit based pensions system to a defined contribution based pension system, which is much more cost conscious, our hope and expectation is that we see some innovation in this area, as otherwise the demand foractive management may well fall off a cliff,” said Divyesh Hindocha, global director of consulting for Mercer’s Investments business.
In particular, asset managers are under pressure to negotiate fees for hedge funds, direct private equity and infrastructure funds.
"Given the plentiful supply of good quality active management, the level and structure of active fees has been remarkably resilient to a slowdown in demand.”
“As we move from a defined benefit based pensions system to a defined contribution based pension system, which is much more cost conscious, our hope and expectation is that we see some innovation in this area, as otherwise the demand foractive management may well fall off a cliff,” said Divyesh Hindocha, global director of consulting for Mercer’s Investments business.
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