The highest average basis point fees paid out to investment managers by institutional investors in 2022 went to hedge funds-of-funds (107 basis points) and to private real assets (83 basis points), according to the 2023 Investment Management Fee Study from the investment consulting firm Callan.
In contrast, the lowest average basis point fees went to passive U.S. large-cap managers (1.9 basis points) and to passive small-cap managers (3 basis points), said the study, released Wednesday.
According to Callan's last study, issued in 2021 and looking at 2020 data, the highest average basis point fees also went to hedge funds-of-funds (117) and private real assets (84). The lowest went to passive U.S. large cap (2) and passive core fixed income (3).
In the latest study, 98% of total fees paid out to investment managers by institutional investors in 2022 went to active managers, a 1 percentage-point increase from 2021.
The study also found that 62% of total assets were managed actively, the same figure as in 2021, while 50% of total active fees went to only 12% of investment management firms.
Meanwhile, passive management represented 38% of total assets, the same as in 2021, and about 2% of fees, down from 1% in 2021.
Callan noted that its 2023 study reflected trends in 2022 fees representing $609 billion in assets under management and $1.5 billion in total fees paid. The firm's fee database includes mandates run by more than 300 investment firms for more than 180 institutional investors.