When asked to specify their total investment costs in basis points, including internal and external costs, the median response was 53, which was lower than 2023 but higher than 2022. But while no clear trend in investment costs was apparent from the data, there remained a strong focus on fee reduction.

More than half of respondents (55 per cent) said they were placing more emphasis on fees during new manager selection, 45 per cent said they were consolidating relationships to better negotiate fee arrangements, and 41 per cent said they were renegotiating fees on underperforming strategies.

The trend towards fewer managers offering a greater array of services, explored in the manager relationships section, may offer potential for greater discounting, Cloherty said.

“I think you are still seeing a high degree of cost pressure on traditional long-only strategies, and pressure on some areas of private markets,” Cloherty said. “Due to the pressures private markets are facing, in an environment where they are not over-subscribed you can see investors asking for concessions.”

Asset owners are asking for discounts where providers want extensions on funding or longer hold periods, and in areas like private credit the greater supply of managers is bringing pressure on fees, he said.