75% of fund managers expect fall in active fees
GLOBAL - Three-quarters of fund managers expect the fees for active asset management to reduce this year, according to a survey conducted by Skandia Investment Group (SIG).
The research says almost two-thirds of fund groups are expecting the use of performance fees to increase.
The survey, part of a broader study by SIG, questioned senior executives at more than 60 fund management groups with combined assets under management of over $7trn (€4.78trn). The groups were asked about their views on a range of areas and issues pertinent to the future of the asset management industry.
The overwhelming majority of executives taking part in the survey said that performance fees will be used more often this year across a range of asset classes. SIG says it believes this trend is likely to be driven in part by the increasing influence on the retail funds marketplace of hedge fund and institutional managers.
Most of the participants also said they expected an increase in the use of equity funds and absolute return vehicles, but there would be a greater prevalence of performance fees in the fixed interest and property sectors.
Nils Bolmstrand, chief executive officer, SIG, says: "The asset management industry is under increasing pressure to demonstrate its commitment to producing value for investors. One way active fund managers are seeking to do this is by aligning their own interests more closely with those of investors through the use of performance-related fees."
He says, "While much debated over the years, performance fees have never really caught on in any meaningful way outside the hedge fund industry and some areas of the institutional space. Our research suggests this may well be about to evolve, and that an increase in the use of performance fees is likely."