Citadel says pressure on asset management fees will increase
Citadel, one of the few active wealth managers to see strong inflows as clients increasingly opt for cheaper passive investments, says it is bracing itself for further downward pressure on fees across the industry. “We talk about it internally as the race to the bottom. There are different categories of pressures faced by asset managers at the moment. The changing regulatory environment requires a growing number of resources to monitor and comply. We require, increasingly, world-class systems and then there is the debate about passive versus active,” said Citadel CEO Andrew Moller. Most of Citadel's funds are actively managed, particularly the multi-asset solutions that offer currency hedges. As far as the performance fees debate is concerned, Moller said the problem was that it focused only on costs. “It’s not a debate. Fees have to be fair and you got to have a value exchange. But ultralow, or even zero, fees lead clients to unsuitable funds. If costs become the only criteria when...
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