Fee compression is real — but unevenly distributed. In passive and mainstream liquid strategies, competition has pushed headline fees to historic lows. In private markets and specialist strategies, pricing power has proved far more resilient.

Our benchmarking across hundreds of mandates shows the bigger issue is often not the headline fee but the structure: performance fees with weak hurdles, administration layers, and fee drag that never appears in marketing material.

This paper examines where investors genuinely have negotiating leverage, where they don't, and how to structure fee arrangements so that manager incentives stay aligned with outcomes.

We also cover the quieter costs — transition, custody, platform and overlay fees — that compound just as surely as management fees do.

The conclusion is not that fees don't matter; it's that total cost of ownership matters more than any single line item.

Key takeaways

  • Fee pressure is strongest in liquid markets, weakest in private markets
  • Structure matters as much as headline rate — hurdles, bases, layers
  • Total cost of ownership includes hidden transition and platform fees
  • Fee reviews give committees real negotiating leverage