(Bloomberg) — With a rush of individuals exploring alternative assets for the first time, a platform dedicated to that space is slashing fees that it says affect portfolio performance for such investments.
CAIS, which works with more than 34,000 financial advisers, is cutting fees to as low as 0.05% for feeder funds that direct investors to alternative assets. The firm currently charges as much as 0.20%, according to people familiar with the matter.
The firm aims to set a new industry standard that lowers fees and makes them more transparent, as part of an effort to “truly democratize alternative investments,” CAIS’s founder and chief executive officer, Matt Brown, wrote in a memo to clients.
“If adopted broadly, this change in fees could save end-investors hundreds of millions, if not billions, per annum 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 Inc. and Hamilton Lane. Such firms have been looking to secure wealth from individual investors as pensions and endowments have reined in commitments to private equity in recent years.
The newly reduced fee will depend on the complexity and assets under management at each feeder fund, according to the memo. The fee structure will apply to new funds, though CAIS is exploring how to retroactively cut fees, the people said.
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