Asset management fees for hedge funds and real estate have decreased since 2008, while fees have increased in long-only equity and fixed-income strategies, according to a Mercer study.
Thirty-six percent of all strategies reviewed by Mercer in both the 2010 and 2008 studies increased fees, 29% cut fees and 35% didn’t change their fees.
Strategies with lower fees since 2008 included eurozone fixed income, down an average of 7.2%; U.K and European equity, 4.6%; U.S. real estate, 4.5%; hedge funds/absolute return, 3.2%; and Japan equity, 1.7%.
Strategies that increased fees included Australia fixed income and New Zealand equity, both up 10.9%; eurozone equity, 6.3%; U.K. equity, 4.7%; and global equity, 2.8%.
Emerging markets equity had the most costly fees, with an average of around 1% in 2010, up from 0.9% in 2008, followed by small-cap equity fees at 0.89%. Global and regional equity strategies averaged 0.7%. Comparisons to 2008 were not available for small-cap and regional equities.
Fixed income had the lowest average fee among traditional active asset classes, at 0.35%.A comparison to 2008 was not available.
The 2010 Asset Manager Fee Survey, Mercer’s fourth biannual study analyzed fee data of 20,000 investment funds, separate accounts and other strategies.
