European institutions ordering less "Vanilla"

4 April 2007

Asset management fees stable but reflect a growing propensity for less plain vanilla products

By: bfinance
Published: April 2, 2007

UK-based institutional investment consultant bfinance released the results from a study of 60 institutional asset management RFPs this week.  Olivier Cassin, Head of Product Development and Research at bfinance says

“The themes that we are seeing at the moment revolve around infrastructure, timber, equity long-short and 130/30 strategies.”

Of the 60 RFPs studied, 6 were for hedge funds of funds.  The management fee for these mandates ranged from 1.01% (on a 100 million GBP mandate) to 1.36% (on a 20 million Euro mandate).  Performance fees for these mandates were not disclosed in the study.

Cassin also indicates that institutional investors view hedge funds as an alpha complement, to a beta or cash portfolio:

“Clearly, Fund of Hedge Funds are gaining momentum in France even with corporate treasuries.  They mix them to pure money market funds to get 50 to 100 bps over EONIA, looking to enhance the returns of their cash reserves.”

Other alternative investment classes made their inaugural appearance in this year’s study, including real estate, commodities, GTAA and currency.

View average management fees across all mandates 

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