Pension schemes are paying their active investment managers up to 70% more than six years ago even though average fee rates have dropped for most asset classes, according to consultancy LCP.
For an active global equity mandate that had matched the return of the global equity index, an investor could be paying up to 70% more in fees than they had been in 2011, LCP reported in its latest Investment Management Fee Survey.
It said this highlighted how active managers were rewarded for simply retaining assets, and not necessarily making above-benchmark returns.
The report’s author, Matt Gibson, partner and head of investment research at LCP, said: “Investment managers have done very well out of increases in assets under management over recent years.”
