Pressure from global asset owners has managed to drive down money management fees within multiple asset classes, according to a report from consultant bfinance.
Among asset classes whose fees were measured as of June, hedge funds of funds saw the greatest reduction in median fees since the most recent data provided for asset classes in June 2016, at 28%, followed by absolute return fixed income fees at 15%; emerging market debt, 10%; emerging market equities, 6%; and active global equities, 4%.
The report shows for quoted fees on $100 million portfolios.
In hedge funds of funds, the median management fee was 58 basis points for the 12 months ended June 30 compared to 80 basis points in the three years ended June 2016.
The report said U.S. funds still quote substantially higher fees than European funds, and that pricing pressure has driven consolidation, with 67 hedge funds of funds with more than $1 billion in assets under management in April compared to 76 funds with more than $1 billion in assets recorded a year earlier.
Absolute return fixed-income fees fell to 41 basis points in the three years ending June 30, from 48 basis points in the three years ending June 2016, thanks to strong demand and "relatively poor visibility on fees being charged by competitors during that period," the report said.
Emerging markets debt fees fell to a median 45 basis points for the three years ended June 30 compared to 50 basis points for the three years ended June 30, 2016, thanks in part to a growth in the number of managers along with investors taking advantage of outflows from the asset class in 2018.
For emerging markets equities, the median management fee was 74 basis points for the three years ended June 30, compared to 79 basis points for the three years ended June 2016.
Lastly, for active global equities, the median management fee was 55 basis points for the three years ended June 30 compared to 57 basis points for the three years ended June 2016.
Data come from manager quotes in response to competitive searches.
