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Article series on fund cost re-charging

As cost pressures mount across the alternatives industry, fund managers are increasingly shifting operational expenses from the corporate profit and loss statement (P&L) to their funds. This three-part article series examines the key considerations in designing cost recharging models that are fair, transparent, and defensible, while balancing investor expectations, prevailing market practices, and regulatory requirements.

Navigating cost allocation: Meeting investor expectations and regulatory scrutiny

Fund managers are operating in an environment of tightening margins, increasing operational complexity, and growing investor sensitivity to fees and value delivered. At the same time, regulators are intensifying their scrutiny of cost allocation practices, focusing on how expenses are charged to funds and whether these charges are applied fairly and disclosed transparently.

Against this backdrop, many organizations struggle to clearly define which activities should be recharged, design robust and pragmatic allocation methodologies, and consistently justify their cost allocation frameworks. Without a well-structured and documented approach, explaining and supporting these practices to investors and regulators can become significantly more challenging.

The following articles explore these issues in detail, offering practical insights on prevailing cost allocation approaches, sound governance frameworks, and day-to-day practices that can help strengthen transparency, consistency, and defensibility in pricing strategies.

Explore our articles

Cost recharging in funds: Setting the scene in a shifting landscape

As the alternative investment management industry navigates in an economically challenging environment, a key topic has come into focus at the intersection of operations, governance, and investor expectations: the allocation of internal costs and external expenses between fund managers, the funds they manage, and ultimately, investors.
Perspective
4 minute read

Building a robust governance framework supporting fund expenses and cost recharge models

As cost-recharging practices have become more advanced in the alternative investment sector in recent years, regulatory scrutiny of these arrangements has increased significantly.
Perspective
2 minute read

From principles to practice: Operationalizing cost recharge models

Once governance is in place and regulatory expectations are met, managers face a practical question: how to implement cost recharging in a way that is consistent, transparent, and justifiable.
Perspective
2 minute read

Get in touch

Arnaud Bon

Arnaud Bon

Partner | Consulting Alternatives Leader
+352 45145 4165
Philippe Theissen

Philippe Theissen

Director | Investment Management
+352 45145 3750