Fitz reveals 80% of managers are subsidising fund expenses

Largest firms applying fee caps

Research firm Fitz Partners has estimated that 79% of cross-border managers distributing into Europe are subsidising their own funds' operating expenses in efforts to keep client charges down.

The firm's Cross-border fund charges study of managers selling into Europe that use third party service providers also found that 19% of recorded subsidies paid by fund groups exceed management fees paid by clients. To reduce client fees, according to the research, 24% of the largest asset managers with funds distributed in Europe are applying a fee caps policy to at least one range of funds. While funds with fee caps typically show similar management fees to those without, they often display higher operating expenses before subsidy but reduce the operating charge passed on to investo...