By Dialogo December 28, 2010 Brazilian police have busted a feared criminal gang which killed at least 50 people and counted more than a dozen officers and some municipal councillors in its ranks, officials said on 22 December. Twenty-five members of the 34-strong gang were arrested the day before on warrants based on wiretaps that found the organization sold weapons to drug dealers in a nest of Rio slums that was cleared by police and soldiers last month. The two local councillors of the Duque de Caxias neighborhood were suspected of running the para-police outfit, while the 13 policemen arrested were part of its “muscle” thought to have carried out hits. “The gang worked like a real criminal enterprise, with roles defined for each member. There were managers and hitmen,” the police chief in charge of the arrests, Alexandre Capote, told media. The gang was one of several comprising police officers that operate in Rio’s notoriously violent and lawless slums. They started activities in late 2006, as militias that forced out local gangs then took over to run extortion rackets. The Duque de Caxias outfit is suspected of killing 50 people, and earning 150,000 dollars a month by illegally selling television cable connections, gas and land to residents, Capote said. According to a former captain in Rio’s elite police unit, the Special Operations Battalion, police-manned militias are present in more than 100 of the city’s 250 worst slums.
The average annual fee for a £50m investment mandate was 65bps, down from 73bps in 2017, saving £40,000 a year, according to the consultant.It added that the largest contributing factor to declining fees was decreasing allocations to active equity mandates.LCP calculated that, as a result of DB schemes changing their asset allocations since 2010, the average scheme was paying more in fees to credit and liability-driven investment managers than to equity managers.Fixed income costs on the riseWhile the average fee for actively managed global equity had decreased by £40,000 for a £50m mandate, the cost of a similar-sized corporate bond mandate had risen by £35,000.LCP suggested that the increase in fixed income fees could be due to pension funds’ demand for bespoke and more sophisticated fixed income strategies.The survey also found wide variations in reported transaction costs for listed infrastructure and actively managed global equity.“This illustrated the need to ask managers to explain and justify these costs,” said LCP.Matt Gibson, head of investment research at LCP, said that falling investment manager fees had allowed investors the opportunity to renegotiate their fees to the new market level.However, he highlighted that reduced costs didn’t always result in value for money “as fees and costs should be considered against the value created by the investment manager”.The LCP survey found that transaction costs for global equity and corporate bonds added 25% and 45%, respectively, to asset management costs on average.It noted that, despite regulatory pressure, many asset managers had not been able to provide detailed transaction cost information, only providing a full breakdown of these costs for 170 of the 677 surveyed products.LCP said that a change in regulation at the end of 2017 had allowed for accurate and comparable analysis of transaction costs data for UK institutional investors for the first time in the history of the survey.The LCP survey was conducted among 71 asset management organisations and covered 49 asset classes.Further readingManagers urged to comply with new cost disclosure templates The UK could legislate to enforce new cost transparency codes if investment managers and service providers do not comply voluntarily, the country’s pensions minister has warnedCost transparency poses threat to asset managers, says Moody’sThe UK’s newly launched investment cost reporting templates could hurt asset managers’ business models and financial stability The average fee for an actively managed global equity mandate for a UK institutional investor has fallen by 11% since 2017, according to LCP.In its latest Investment Management Fee Survey, the consultancy cited increased competition and downward pressure from low-cost index trackers as the main reasons for the fall.The survey also revealed “notable” fee reductions in a range of other key asset classes, including multi-asset diversified growth funds, multi-asset credit, liability-driven investment strategies, and passive global equity mandates.The pensions adviser estimated that a typical £500m (€548m) defined benefit (DB) pension fund in the UK had seen a reduction in total investment fees from 39 basis points to 36bps, or £140,000 a year, in the past 10 years.