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Pension funds mull fee cuts as hedge funds balk
February 9, 2010
The past ten months have been particularly beneficial for active managers, and so it is no surprise that pension funds today have a more favourable view of the fees they pay for actively-run mandates. In addition, more pension funds today have succeeded in negotiating lower management fees following a particularly difficult period for markets in 2008. The findings are consistent with the results of our first fee survey in the winter of 2008 and 2009 when the financial crisis was in full swing and pension funds were highly critical of active strategies and their associated fees. At the time, 20% of pension funds who responded to our survey believed they received either very poor or poor value for money for their investment in a FoHF. Another 13% said they received fair value and only 10% reported getting good value, with 57% not having any exposure to FoHFs.
Today, a higher number of pension funds have eschewed FoHFs, with 67% of respondents noting that they have no exposure to the asset class, an increase of 10% from our last survey. Of those who do have exposure, sentiment has improved visibly in response to our query to consider their management fees and then rate them as very good, good, fair, poor and very poor for each of 14 different asset classes and strategies. When considering management fees, only 10% of pension funds rate their FoHF investment as poor or very poor.
This represents an improvement of 10% from our last survey. Eight percent say they get either very good or good value for money for their FoHF investment while 15% believe they receive fair value. Sentiment has improved toward all active strategies, not just FoHFs. Single hedge funds, active currency, long-only equity, fixed-income and Global Tactical Asset Allocation (GTAA), all received significantly higher ratings this year while passive equity fees elicited less excitement.
For full release, please click link below.
Original Posting At: bfinance
Today, a higher number of pension funds have eschewed FoHFs, with 67% of respondents noting that they have no exposure to the asset class, an increase of 10% from our last survey. Of those who do have exposure, sentiment has improved visibly in response to our query to consider their management fees and then rate them as very good, good, fair, poor and very poor for each of 14 different asset classes and strategies. When considering management fees, only 10% of pension funds rate their FoHF investment as poor or very poor.
This represents an improvement of 10% from our last survey. Eight percent say they get either very good or good value for money for their FoHF investment while 15% believe they receive fair value. Sentiment has improved toward all active strategies, not just FoHFs. Single hedge funds, active currency, long-only equity, fixed-income and Global Tactical Asset Allocation (GTAA), all received significantly higher ratings this year while passive equity fees elicited less excitement.
For full release, please click link below.
Original Posting At: bfinance
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