Supporting Innovative Fee Structures for Active Managers: The Role of FinTech
A headline result from TABB Group’s latest survey of asset managers is that the buy-side are worried about the future. While the markets have been buoyant, with AUM growing steadily, flows into passive funds have continued to outpace those into active funds and the downward pressures on costs have increased. Active managers are starting to consider introducing performance fees. Often used by hedge funds, implementing these for use by traditional managers can be more complex than calculating AUM-based management fees, which often still involve spreadsheets. This Market Note discusses the trends driving this change, the technical challenges this poses, discusses approaches leading firms are talking and highlights solutions providers in this space.