| Exclusive bfinance / Fund management fees relatively stable year to year |
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| 17/04/2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Access to specialised management remains something that needs to be paid for. Once more, bfinance's study on management fees demonstrates that this type of management comes with a higher price tag on the British, French and German market. The analysis of the calls for tenders conducted by bfinance in 2005 shows that, apart from alternative assets, emerging markets are commanding the highest fees among all the traditional asset classes. While a European equity fund's fees average 49 basis points, the price of an emerging market fund almost doubles to 89 bp. All in all, the average equity fund's price is 62.5 bp. Those results are backed by a previous and unrelated analysis performed by Mercer, the investment consultancy, which found that the median management fee of an investment in an emerging market fund of $50 million is 95 bp, which is the most expensive of all the asset classes. The specialisation rule also applies to fixed income management. With an average management fee at 72 bp, high yield bond funds are the most expensive fixed income assets in which to invest. The average cost of a fixed income fund, regardless of its size, is 42.7 bp. With respect to alternative assets, funds of hedge funds, as well as private equity funds of funds, are amongst the most expensive funds, respectively at 124 bp and 103 bp. However, currency funds are more expensive than private equity funds of funds, with their fees averaging 115 bp. Average Management Fee by Asset Class - France, Germany, United Kingdom
* Average supplementary performance fee: 5%, with a 8% high watermark ** Average performance fee: 10%, with a threshold For 2004, analysis of 33 calls for tenders For 2005, analysis of 65 calls for tenders (approx 193 mandates) Source: bfinance |
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Articles of the same Topic : Fees
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