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InvestorForce, part of
MSCI Inc. (NYSE: MSCI), announced today that it has released the first in a series of whitepapers,
Institutional Investment Management Fees: Findings Regarding Dispersion and Correlation with Performance. The paper provides unprecedented insight into actual post-negotiated management fees for institutional investment products.
Jim Morrissey, CEO of InvestorForce, said, “Two important findings emerge from this paper. First, contrary to the popular view that asset managers charge close to the same fees for a given investment style and mandate size, the results find significant differences in actual post-negotiated management fees, even within the same market segment. Second, contrary to the perception that managers with stronger performance command higher fees, the data shows little or no correlation between performance and actual post-negotiated management fees.”
Data for this whitepaper was sourced from InvestorForce’s Manager Fee Tracker, an online analytics platform that provides institutional investors, consultants and asset managers with access to over 34,000 observations of actual “post-negotiated” management fees across 31 investment styles along with a range of mandate sizes and plan types. While individual manager fees are never disclosed, Manager Fee Tracker users can calculate fee universes and distribution metrics to provide an unprecedented level of fee transparency.
Dan Kelly, Chief Operating Officer of NEPC, one of the world’s leading independent consultants, said, “InvestorForce’s Manager Fee Tracker and this white paper are helping bring much-needed institutional asset management fee transparency to NEPC and its clients. Providing greater transparency into asset management fees is an important component of NEPC’s offering to our clients. This analysis – backed by a significant volume of actual management fee observations – will help us assess the appropriateness of the asset management fees paid by our clients.”
Future white papers will examine the relationship between fees and risk, tracking error, portfolio concentration and other key institutional investment metrics.