Albourne Partners has been an advocate for fee innovation in the investment industry, focusing on the shape of fees, and fee discovery and transparency. A recent review by the firm showed that managers are being rewarded for fee innovation. John Claisse, the firm’s chief executive said there was also a relationship between manager performance and willingness to be flexible on fees.
“We looked at managers that had a collective 189 different fee changes made over the last two years, and our research showed that, from the point where those changes were made, 70% had a positive trailing three-year return, so it was not necessarily managers that were already underperforming,” he said in a Fiduciary Investors Series podcast.
Albourne has been looking at the shape of fees since 2012 for its clients, and implemented a 1-or-30 approach to alternative manager fees. The consultant also launched Into the Matrix initiative in 2016, gathering data from 750 funds with over $600 billion in assets, who are answering surveys about what types of fee structures they’d be willing to look at and be flexible with.
Most recently, Albourne, in conjunction with AIMA, launched a due diligence questionnaire that focuses on diversity and inclusion.
“We’ve had phenomenal feedback about the questionnaire and already more than 400 funds that have submitted the questionnaire. The feedback from investors is they have been struggling on how to gather the data, so having a standardised template for them is helpful. On the manager side our preliminary feedback has been positive, it is helpful in triggering their own work internally and new policies in response to thinking through the questions and enhance their own D&I.”
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