(Bloomberg) — With a rush of individuals exploring alternative assets for the first time, a platform dedicated to that space is cutting fees it says affect portfolio performance for such investments.
CAIS, which works with more than 34,000 financial advisers, is cutting fees as low as 0.05% for feeder funds that steer investors towards alternative assets. The firm currently charges up to 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 founder and chief executive Matt Brown wrote in a memo. for clients.
“If widely adopted, this change in fees could save end-investors hundreds of millions, if not billions, annually in unnecessary fees and expenses,” he wrote.
A CAIS representative declined to comment.
CAIS is backed by alternative investment firms including Apollo Global Management Inc. and Hamilton Lane. Such firms have sought to secure wealth from individual investors as pensions and funds have curbed commitments to private equity in recent years.
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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 the new funds, although CAIS is exploring how to cut fees retroactively, the people said.