Close to half of pension plans review the fees they pay their money managers annually, up from 31% two years before, according to the Callan Investment Institute's 2011 Investment Management Fee Survey.
The survey of more than 50 corporate and public plan sponsors, endowments and foundations overseeing a combined $254 billion in assets and 160 investment management organizations with $8 trillion in assets under management showed sponsors negotiating fees with 42% of their new managers and 14% of existing managers.
Anna West, an assistant vice president and manager of Callan's published research group, said in an interview that public funds negotiate with their managers more frequently than corporate funds.
Compared to the previous survey two years ago, the latest results showed mostly incremental changes, with asset class segments attracting inflows — including passive U.S. large-cap equity, high-yield fixed income and active emerging markets equities — seeing incremental fee gains of 1 to 3 basis points, Ms. West said.
In addition, the median fee for broad core fixed-income mandates fell between 2004 and 2009 from 34 basis points to 25 basis points, and then rebounded over the past two years to 27 basis points.
For alternatives strategies, which the Callan surveys started tracking in 2009, the latest figures showed real estate-related fees increasing but hedge fund-of-funds fees declining over the past two years, Ms. West said.