LONDON — Emerging market equity managers charge the most of all traditional asset managers, according to a global survey of institutional asset management fees published this week by Mercer Investment Consulting Inc.
The lowest published fees are for fixed-income portfolios and for government bonds in particular, said Marianne Feeley, senior investment manager researcher, in London.
The highest fees are generally charged in asset classes where managers have the greatest ability to add value and in some cases, such as small-cap stocks, where the money manager may face tight capacity constraints, she said.
The average fee for a $50 million emerging markets equity separate account was 95 basis points; the average dropped to 90 basis points on a $75 million mandate.
Mercer hasn't yet done any research comparing the cost of asset management with the fee charged. "Based on anecdotes, we would expect research costs to be higher for emerging markets than for more liquid markets. In terms of how the fees are generated, it comes partly from the cost side and also from what the market will bear," said Ms. Feeley.