Asset management costs for the 10 largest Dutch pension funds rose by €500m in 2024 to €4.6bn, a rise of 12%.
The main reason for the increase was an uptick in performance fees paid to private equity, real estate and infrastructure managers, according to a study conducted by pension consultancy Bell.
Asset management fees, excluding transaction costs, rose from €4.1bn to €4.6bn, with performance fee hikes responsible for €400m of the rise and the remainder being due largely to an increase in assets under management. Transaction costs remained almost unchanged at €1bn.
Relative to total invested assets, asset management costs, excluding transaction costs, remained pretty much flat, rising only from 0.40% to 0.41%.
In the previous two years, after reaching a record high of €6.8bn in 2021, asset management costs had dropped in line with falling performance fees.
Pension funds in the country are also incurring additional costs for their preparations for the switch to new defined contribution arrangements, for example for new IT systems and consultants.
As a result, administration costs rose by 18%, from €113m to €751m. In 2022, admin costs stood at a mere €553m.
This article was first published on Pensioen Pro, IPE’s Dutch sister publication. It was translated and adapted for IPE by Tjibbe Hoekstra
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