They can pick off the low-hanging fruit from larger funds.” dictate fee terms Mark Carnegie, co-founder of Carnegie Wylie and a renowned private equity figure in Australia, delivered a headline-grabbing presentation urging superannuation funds to stonewall alternatives managers charging unjustified fees. Funds should demand that managers invest up to 50 per cent of their net worth in their products and only manage one vehicle to curb asset-raising temptations, Carnegie said. Funds should also oppose the large base fees charged by managers with hundreds of millions, or even billions, under management, since a 2 per cent base fee was only needed by managers of small funds to keep their businesses running. He said large base fees “has led some people to question whether alternative [investment] strategies are fee structures in search of an asset. If you let that continue, you will have introduced into the retirement savings of Australians an investment cancer.” He said the fee model proposed by Frontier Investment Consulting chief Fiona Trafford- Walker – of a cost-recovery base fee, plus performance fee – was a good basis upon which funds should negotiate more aligned fees with managers.

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