Bruckhaus Quist’s Research Paper Reveals Big Falls in Management Fees for EMD and Funds of Hedge Funds

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The figures in the report are based on real fees, quoted by asset managers

HONG KONG, February 27, 2020 / — Bruckhaus Quist, a global investment management firm that offers actively managed, global investment solutions to clients around the world, including pension funds, corporations, charities and individuals, today announced that there have been substantial reductions in management fees across several asset classes, especially funds of hedge funds and emerging market debt (EMD), according to a new research conducted by the firm.
The report argues that investors, which are buying simple, benchmark-focused EMD, struggle to access the most interesting corners of the opportunity as managers often fail to justify the management fees charged. EMD is becoming more strategically important both in global markets and in investor’s portfolios, however, EMD pricing, which proved exceptionally resilient until 2016, has since fallen, with a 12% drop in quoted fees.
Michael Lau Yim, Sales Director for Asia Pacific Region at Bruckhaus Quist, declared: “Treating EMD as a single asset class is not feasible and investors should see stronger overall returns by selecting the best manager in each region and asset class – local currency sovereign debt, hard currency sovereign debt and hard currency corporate debt – and with specific knowledge and skills. EMD is not a single opportunity so it cannot be captured by a single, broad mandate.”
Bruckhaus Quist’s research also underlines that, across the asset classes analyzed, funds of hedge funds fees registered the biggest fall, dropping by 26% over the same, 2016 to present day, period of time. This occurred from a lack of visibility on actual fees or total costs, or the reality that manager selection methods may not facilitate and maximize competition on pricing.
“Asian funds of hedge funds managers are more likely to state upfront that fees must not exceed a certain level, as US and European managers tend to prioritize overall value. The reductions in average fees across various asset classes are welcome news for investor clients. Yet, there are still significant barriers to price competition across the asset management industry”, Mr. Lau Yim concluded.
Fee compression has been driven by factors including the rise of cheaper competitors, increasing transparency on costs, and expansion of the manager’s servicing universe.

About Bruckhaus Quist
Bruckhaus Quist is a Hong Kong-based, global investment management firm. The company offers actively managed, global investment solutions to clients around the world, including pension funds, corporations, charities and individuals. The firm has a global investment experience. Collectively, Bruckhaus Quist’s Board has over 185 years of investing and operating experience in financial services. The team’s experience and extensive network of industry contacts enables us to provide significant business development assistance to our portfolio companies. Bruckhaus Quist is committed to constantly reappraising and further developing the business model to ensure the company remains assured and confident in an ever-changing landscape.

Joachim Jarosz
Bruckhaus Quist
+852 58010243
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Source: EIN Presswire