Callan's 2025 Cost of Doing Business Study Details Fee Trends for Institutional Investors

SAN FRANCISCO, June 23, 2025 /PRNewswire/ -- Callan, a leading institutional investment consulting firm, released the results of its 2025 Cost of Doing Business Study, which offers a comprehensive look at the investment management fees paid by institutional investors. Based on data from 180 asset pools totaling more than $772 billion in assets, this update captures fees paid in 2024 and extends trends tracked since 2010.

"The study provides an important benchmark for institutional investors evaluating the cost-effectiveness of their investment programs," said the study's author Ivan "Butch" Cliff, executive vice president and director of research at Callan. "While they continue to find ways to lower fees within asset classes, shifts in asset allocation—especially toward alternatives—are pushing total fund costs higher for many."

Key Findings 

• Total investment management fees averaged 40 basis points across all investor types, which include nonprofits, public funds, corporate funds, and insurance pools. 
• Asset allocation is the single biggest driver of total fund fees. As more institutional investors shift toward private equity/private credit, real assets, and to a lesser extent hedge funds, they are accepting higher fees in exchange for potential diversification and return benefits.
• Average fees for nonprofits have risen 16% since 2020, while corporate and public fund fees fell by 17% and 4%, respectively. 
• On average, larger funds paid 24%–37% more in total fees than small ones, primarily because they allocate more to alternatives. 
• While some cost savings were achieved through passive strategies and manager consolidation, these efforts were often outweighed by increased allocations to costlier asset classes.

Callan has published similar updates in 1998, 2002, 2005, 2009, 2013, 2016, and 2021. This year's study includes data from our proprietary custody fee database to help institutional investors evaluate those costs. It also adds more detail on the funds' type and size:

• Nonprofits were divided into two groups: over and under $1 billion.
• Corporate funds were split between total return and liability-driven plans, as well as by size: over and under $1 billion.
• Public funds were divided into three groups: Over $10 billion, over $1 billion, and under $1 billion.
• Insurance pools were included for the first time.

Find the summary blog post and survey here.

About Callan

Callan was founded as an employee-owned investment consulting firm in 1973. Ever since, we have empowered institutional clients with creative, customized investment solutions backed by proprietary research, exclusive data, and ongoing education. Today, Callan advises clients with more than $3 trillion in total assets, which makes it among the largest independently owned investment consulting firms in the U.S. Callan uses a client-focused consulting model to serve pension and defined contribution plan sponsors, endowments, foundations, independent investment advisers, investment managers, and other asset owners. Callan has six offices throughout the U.S. Learn more at callan.com.

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SOURCE Callan LLC