Exclusive Callan Study Examines Fees for Real Assets Funds

SAN FRANCISCO, Dec. 10, 2024 /PRNewswire/ -- Callan, a leading institutional investment consulting firm, announced the release of its first 2024 Real Assets Open-End Funds Fees and Terms Study, analyzing 144 real assets partnerships that represent fund offerings across real estate, infrastructure, farmland, and timberland.

"What stands out in the study is how many institutional open-end options exist today and how seemingly minor differences in fees and terms can impact investors," said author Aaron Quach, vice president in Callan's Real Assets Consulting group. "With each year, Callan's fee study datasets broaden, which will give us greater ability to see trends in fees over time."

The study is intended to help institutional investors better evaluate open-end real assets funds, serving as an industry benchmark when comparing a partnership's terms to its peers. The study can also be useful for real assets investment managers to determine how their fees and terms compare to other managers.

Key Findings

• The median management fee for core real estate equity funds is 96 basis points (based on $25 million net asset value).
  
  
• 55 of 144 open-end real assets funds charge performance fee, the vast majority being European waterfalls.
  
  
• 63% of open-end real assets fund have a redemption queue that is pro rata based on NAV, and 53% have redemption notice periods of 90 days.

Conclusions

Investors have no shortage of options: There continues to be strong demand among investors for open-end real assets funds, with managers launching new open-end funds and competition increasing in most strategy types analyzed in the study.

Fees and terms can be a differentiator: As fees and terms may vary widely depending on the strategy, funds offering more investor-friendly fees and terms can be more competitive in searches.

The devil is in the details: While some open-end fund terms are relatively standardized across the universe, certain nuances such as redemption notice periods and queue methodology can have meaningful implications for investors when they need liquidity.

The study features data from the proprietary survey Callan conducted, data provided by investment managers in the firm's database CallanDNA, as well as data from fund documents reviewed as part of Callan's due diligence process.

Find the summary blog post and study here.

About Callan

Callan was founded as an employee-owned investment consulting firm in 1973. Ever since, we have empowered institutional clients with creative, customized investment solutions backed by proprietary research, exclusive data, and ongoing education. Today, Callan advises clients with more than $3 trillion in total assets, which makes it among the largest independently owned investment consulting firms in the U.S. Callan uses a client-focused consulting model to serve pension and defined contribution plan sponsors, endowments, foundations, independent investment advisers, investment managers, and other asset owners. Callan has six offices throughout the U.S. Learn more at callan.com.

Media Contact:

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415-274-3020

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SOURCE Callan LLC