Fees for institutional asset management services could sag this year, after holding steady in 2008, according to a biennial survey conducted by Mercer.
Alternative strategies, with rich, complex fee structures, should be a focus of fee negotiations this year after widespread disappointment with results for 2008, Divyesh Hindocha, a London-based worldwide partner with Mercer, said in a telephone interview.
“The supply-demand dynamics have changed materially,” with clients much less willing to pay upfront fees for segments such as hedge fund-of-funds providers, he said. That change may well prove to be secular rather than cyclical, he added.
By contrast, Mercer’s Asset Manager Fee Survey 2008, based on fee data for 19,000 asset management products from 3,400 investment management firms in Mercer’s database, predicts only a “small decrease” in median fees for U.S. all-cap/large-cap equity commingled products.
