Retaining value through institutional fees

The Challenge 

A leading regional foundation wanted to assess if an investment manager handling £23m of its £60m fund was worth the cost. They were worried about how well their assets were performing, 

The thinking in response 

• Isio carried out an independent review of the manager’s performance and fees. Over five years, the manager’s equity investment returns were significantly below the global market benchmark. This underperformance had an estimated impact of around £6 million. 

• The review also looked at fees. The manager charged around 0.70% annually, while a similar investment approach using index funds and access to institutional fee rates could have cost substantially less. This meant a potential saving of £130,000 per year – money that could be redirected to charitable work. 

• Isio also highlighted that a better value approach could also reduce the charity’s governance burden and still meet the foundation’s environmental, social and governance requirements. 

Improvements in financial confidence 

The foundation gained clear insight into the manager’s performance and costs. The findings supported a shift toward a more cost-effective investment strategy, freeing up significant funds for charitable projects while maintaining alignment with ESG priorities.