This report organizes management fee data, exploring the current landscape of separate account fees and the differences in actual fees paid by public plan investors versus managers’ stated fees. Asset owners can use the report to benchmark what they can expect to pay based on the amount they are seeking to allocate.
Included are the stated management fees of 1,139 separate account structures from within Nasdaq eVestment™ Analytics' platform, and 88 cases of actual fees paid by public plans and their corresponding managers’ stated fee comparisons, using documents uploaded to Nasdaq eVestment Market Lens.
Discounts from stated fees are the norm, but vary widely depending on several factors
Most management fees paid by public plans sourced from Nasdaq eVestment Market Lens documents were lower than the manager-reported fee structures in Nasdaq eVestment Analytics. Factors such as commitment size, strategy geographic, and capitalization focus each play a role, while allocations smaller-than-minimum investment amount or negotiating the use of performance-based structures drastically alter actual fees paid.
Fee breakpoints and dispersion data offers insights
US Small Cap Value strategies had fee dispersion as wide as 0.25% to 1.50% for a $50 million commitment while EAFE Large Cap Growth SMAs were strongly concentrated around the 0.65% mark. Additionally, fee breaks for US focused strategies were more generous than their ex-US counterparts. Having insight into the dispersion (or concentration) of fees charged by managers can help an asset owner make an informed decision on a potential SMA commitment and inform any potential fee negotiations.
Better performance doesn’t always mean higher fees though larger (Firm AUM) is often less (expensive)
While there are some strategies where top quartile performers tended to charge higher fees, across all strategies analyzed there was no clear correlation between these factors. For example, EAFE Small Cap Growth, where bottom quartile performers state a median fee of 1.00%, top quartile performers market a median fee of 0.90%. In terms of firm size, the data showed the largest quartile firms’ median stated fees were almost always lower than those of the smallest quartile.
This report organizes management fee data, exploring the current landscape of separate account fees and the differences in actual fees paid by public plan investors versus managers’ stated fees. Asset owners can use the report to benchmark what they can expect to pay based on the amount they are seeking to allocate.
Included are the stated management fees of 1,139 separate account structures from within Nasdaq eVestment™ Analytics' platform, and 88 cases of actual fees paid by public plans and their corresponding managers’ stated fee comparisons, using documents uploaded to Nasdaq eVestment Market Lens.
Discounts from stated fees are the norm, but vary widely depending on several factors
Most management fees paid by public plans sourced from Nasdaq eVestment Market Lens documents were lower than the manager-reported fee structures in Nasdaq eVestment Analytics. Factors such as commitment size, strategy geographic, and capitalization focus each play a role, while allocations smaller-than-minimum investment amount or negotiating the use of performance-based structures drastically alter actual fees paid.
Fee breakpoints and dispersion data offers insights
US Small Cap Value strategies had fee dispersion as wide as 0.25% to 1.50% for a $50 million commitment while EAFE Large Cap Growth SMAs were strongly concentrated around the 0.65% mark. Additionally, fee breaks for US focused strategies were more generous than their ex-US counterparts. Having insight into the dispersion (or concentration) of fees charged by managers can help an asset owner make an informed decision on a potential SMA commitment and inform any potential fee negotiations.
Better performance doesn’t always mean higher fees though larger (Firm AUM) is often less (expensive)
While there are some strategies where top quartile performers tended to charge higher fees, across all strategies analyzed there was no clear correlation between these factors. For example, EAFE Small Cap Growth, where bottom quartile performers state a median fee of 1.00%, top quartile performers market a median fee of 0.90%. In terms of firm size, the data showed the largest quartile firms’ median stated fees were almost always lower than those of the smallest quartile.
The data in this report is sourced from Nasdaq eVestment Analytics and Nasdaq eVestment Market Lens solutions.
The data in this report is sourced from Nasdaq eVestment Analytics and Nasdaq eVestment Market Lens solutions.
Nasdaq eVestment Analytics is a set of best-in-class tools for analyzing, comparing and charting data on 25,000+ institutional strategies — traditional and alternative — in the Nasdaq eVestment database. Advanced capabilities allow users to quickly zero-in on specific strategies or analyze entire peer universes.
Nasdaq eVestment Market Lens is a searchable document library, a directory of consultants, investors and managers and their network of relationships, a dynamic database of consultant ratings and recommendations, and a log of manager searches at over 15,000 public and corporate plans in the U.S., U.K., Canada and Australia.
