Asset management fees are dropping sharply across major active strategies as pricing power shifts toward institutional investors, according to new research from bfinance. Global emerging market equity fees have fallen 13% since 2022, European high-yield credit fees are down 12%, and impact equity fees have declined 14%. The consultancy notes a widening gap between quoted fees and actual negotiated rates during manager searches, signaling potential broader pricing changes ahead.
Private markets present a more complex picture. While direct lending strategies face pricing pressure amid a difficult fundraising environment and weak distributions, many limited partners report fee increases in certain private debt categories. Cost improvements are concentrated among large institutional allocators, leaving smaller institutions and wealth sector entrants at a disadvantage. The consultancy warns that fee reductions in private markets are often masked through aggressive discounting rather than transparent stated fee cuts, with cost transparency remaining problematic.
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FXnCO Insight
** Institutional investors should aggressively negotiate fees during manager searches now, as the gap between posted and achievable rates creates immediate savings opportunities, particularly in public market strategies.
Source: Finance Magnates