(Bloomberg) — As a surge in individuals exploring alternative assets for the first time, platforms specializing in the space are slashing fees that they say can hurt the performance of portfolios of such investments.
CAIS, which works with more than 34,000 financial advisers, will slash fees on feeder funds that steer investors into alternative assets to as low as 0.05%.The firm currently charges a maximum of 0.20%, according to a person familiar with the matter.
The firm aims to set new industry standards for lower fees and greater transparency as part of an effort to “truly democratize alternative investing,” CAIS founder and CEO Matt Brown wrote in a client note.
“If widely adopted, this fee change could save end investors hundreds of millions, if not billions, of dollars annually in unnecessary fees and expenses,” he wrote.
A representative for CAIS declined to comment.
CAIS is backed by alternative investment firms including Apollo Global Management and Hamilton Lane LLP, which have sought to secure wealth from individual investors as pension and endowment funds have curbed private equity investments in recent years.
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The new lower fees will be determined by each feeder fund’s complexity and assets under management, according to the memo. The fee structure will also apply to new funds, but CAIS is considering ways to reduce fees retroactively, the people said.
