"We believe that many of the value propositions in the industry are weak and that little investment is conducted on a genuinely long-term basis. Our analysis suggests that the pension fund ‘food chain’ – the annual payments a pension fund makes to the various agents it employs – has increased by 50% over the past last five years. Much of this increase reflects a shift in assets away from traditional long-only and towards more expensive alternative asset classes. While an individual pension fund may get value from paying a fee of 2% plus 20% of performance, it is clear that pension funds in aggregate will be worse off – there is not enough alpha to go round."
They go on to say that there might be a backlash against the level of fees.