The strategically important real estate fund management discipline is one of the more highly remunerated areas within the property industry. Fund management fees are negotiated directly between institutional client and provider, each contract being of a bespoke and unique to the given client and portfolio type. As one would expect, these contracts are commercially sensitive documents and confidential in nature. Nevertheless, despite this lack of transparency, most contracts conform to similar fee calculation mechanisms based on a percentage of the total capital value of the fund. This fee is further moderated for complexity, asset type, specification and extent of fund manager mandate.

Through industry experience and initial research by the paper authors, it is believed that fund management fees for this activity are considerably higher in Germany than in the United Kingdom despite the fact that these are two not significantly dissimilar markets. The objectives of this paper include determining the reasons for this apparent discrepancy; identifying the scope of service provided in German and British fund management contracts; the level of competition within the market place; fee structure transparency etc.