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2013 Business Expense Benchmark Survey
Chart 31 shows that less expensive APAC headcount
costs are impacting the overall level of spending in
each major management company expense category
outside investment management. As shown, costs in
APAC are lower across the board than in other regions.
The bulk of this is due to compensation.
In operations and technology, third-party expenses
in APAC at 8 basis points are actually higher than
in the U.S. (5.3 basis points) and in EMEA (7.1 basis
points). In risk and compliance, APAC and EMEA third-
party expenses are on par at 1.0 and 0.9 basis points,
respectively, lower than the 5.3 basis points in the U.S.
A similar pattern holds true for business management,
where APAC and Europe are on par (5.0 and 5.3 basis
points, respectively) and U.S. third-party expenses are
higher, at 6.9 basis points.
The only area where APAC third-party expenditures are
noticeably lower than in the other regions is marketing.
For this function, APAC registers only 5.0 basis points
of average cost compared to 17.2 basis points in EMEA
and 6.2 basis points in the U.S.
A very similar set of results is evident when we compare
APAC funds with $1.5 billion AUM. This is shown in
Chart 32.
U.S. funds with $1.5 billion AUM spend $7.6 million on
average on management company expenses outside
of investment management. This compares to $8.4
million for EMEA funds. The mean between those two
sets of firms is $8.0 million. This compares to total
expenditures outside investment management of only
$4.9million in APAC—a figure 39% lower than themean.
As was previously the case, firms with $1.5 billion AUM
in APAC have total headcount that lines up closely
with similarly sized European firms. APAC hedge funds
have 42.7 total headcount, of which 23.0 are focused
outside investment management. European firms have
43.4 headcount, of which 28.6 work in investment
support and business management. U.S. firms continue
EMEA
Chart 29: Management Company Expenses By Category: $100 Million Fund
(Variance to Mean Spend by Region)
Source: Citi Prime Finance. U.S. dataset reflects 20 firms with $2.3 billion AUM.
EMEA dataset reflects 13 firms with total AUM of $1.2 billion. APAC dataset reflects 12 firms with total AUM of $1.2 billion
APAC
U.S.
-60%
-40%
-20%
0%
20%
40%
60%
80%
Operations and Technology
Risk and Compliance
Marketing
Business Management
-13%
+14%
-1%
+14%
-14%
-43%
0%
+71%
-28%
+19%
-6%
-13%
Chart 30: Relative Management Company
Expenses: $500 Million Fund
0
$1.5M
$3.5M
$4M
$4.5M
$5M
38%
US
EMEA
APAC
$3.16M
$4.38M
$3.77M
-42%
Source: Citi Prime Finance. U.S. dataset reflects 10 firms with $5.3. billion AUM.
EMEA dataset reflects 6 firms with total AUM of $3.3 billion.
APAC dataset reflects 5 firms with total AUM of $2.4 billion
$3M
$2.5M
$2M
$1M
$500K
$2.18M