HONG KONG, Dec 15 (Reuters) - Fees charged by managers of alternative investments such as hedge funds, private equity, infrastructure and real estate fell during the last two years as investors turned cost-conscious after the financial crisis, a Mercer survey showed on Wednesday.
The survey, which screened fee data for more than 20,000 products from more than 4,000 money managers, showed an average decline of 4.5 percent in the fees levied by U.S. real estate products between 2010 and 2008.
Absolute return hedge funds’ fee fell by an average 3.2 percent, it noted.
“Although not universal, subdued investment returns have taken the edge off many alternative asset products,” Divyesh Hindocha, global director of consulting for Mercer’s investment consulting business, said in a statement.
“Combined with an increased focus on operational costs, this trend has put growing pressure on asset managers to reduce the complexity of their products and lower their fees in the pricey alternatives arena.”
Fees charged by money managers for investments in the traditional asset classes have shown a mixed trend, the survey noted, with those for long-only equity and fixed income strategies showing increases.
For strategies surveyed in both 2008 and 2010, 36 percent raised fees, while 29 percent reduced charges. (Reporting by Nishant Kumar; Editing by Ken Wills)
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