Key Takeaways
- • Callan's research, as reported by Pensions & Investments, finds that nonprofit asset owners pay higher investment fees than other types of asset owners.
- • The fee differential is attributed to nonprofits' larger allocations to alternative investments.
- • The finding points to fee drag from alternatives as a cost consideration for institutional portfolios with significant private-markets exposure.
Summary
Pensions & Investments reports, citing research from consultant Callan, that nonprofit organizations pay higher fees than other asset owners. The higher costs are linked to nonprofits' allocations to alternative investments, which typically carry more expensive fee structures than traditional public market strategies.
For institutional allocators, the finding highlights how portfolio construction choices flow through to total cost of ownership. Investors weighing increased allocations to private equity, hedge funds, and other alternatives may need to account for fee levels that differ from those of peers with more liquid, lower-cost mandates.
The article is part of Pensions & Investments' coverage of institutional investing. It is written by Rob Kozlowski.
For institutional allocators, the finding highlights how portfolio construction choices flow through to total cost of ownership. Investors weighing increased allocations to private equity, hedge funds, and other alternatives may need to account for fee levels that differ from those of peers with more liquid, lower-cost mandates.
The article is part of Pensions & Investments' coverage of institutional investing. It is written by Rob Kozlowski.
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