Management fees charged by some 2016 vintage private debt funds reached an eight-year low last year, after four years of falling fees for funds in the sector, according to alternative assets data and analysis firm Preqin.

In its 2017 global private debt report, Preqin said the average (mean) management fee for private debt funds had fallen from 2.08% for 2013 vintage funds to 1.63% for 2016 vintage funds.

Ryan Flanders, head of private debt products at Preqin, said: “The majority of private debt investors do believe that their interests are aligned with those of their fund managers.”

A quarter of investors polled said terms had changed in their favour over the past few years, he said.

“This general consensus and the diminution of the average industry-wide management fee charged by private debt managers suggests that investors are making ground in moves to equalise the trade-off between fees and fund manager expertise,” Flanders said.

The research firm said that the spread of management fees across separate private debt strategies reflected the complexity of portfolio management, which varied according to strategy and fund size.

Direct lending funds charged the lowest fees, Preqin said, because as vehicles with no equity component they were less expensive for the manager. Venture debt funds had higher fees because deploying early stage funding used a lot of resources.

Preqin found that only 6% of private debt investors said they never invested due to the terms and conditions on offer.

A fifth of investors often chose not to invest, and 74% occasionally decided not to invest because of fund terms, the data showed.

Last year, Preqin said an aggregate $93bn (€88bn) was raised internationally across 131 private debt funds which closed in 2016, with this figure likely to rise as more data became available. This is likely to mean that 2016’s final figure will be at or near 2015’s level of $97bn.

In its report, the firm said the trend towards a greater concentration of capital among fewer funds continued in 2016, with 16% fewer funds closing in that year than had in 2015, and the average fund size increasing to $710m.

Last week, investment advisory group Siglo said competition has pushed down fees for senior secured loan funds in Switzerland.