Skandia research signals more use of performance fees

Two thirds of fund managers expect the use of performance fees on equity portfolios to rise next year, according to research from Skandia Investment Group.

Half the 40 respondents to Skandia's survey expect more absolute return funds to implement performance-based fees in the future. And 58% expect fixed fees to fall at the same time as active managers face increasing pressure from cheaper passive vehicles such as ETFs. James Millard, SIG's chief investment officer, says: "With asset managers under continued pressure to demonstrate value for investors, combined with increasing pressure from low cost new entrants and low cost alternative solutions such as ETFs, we expect to see fees polarise. "The increased availability of low cost source...