SBAI Publishes Standardised Expense Reporting Template to Improve Transparency of Third-Party and Pass-Through Costs
The Standards Board for Alternative Investments (SBAI) today released an updated Standardised Total Expense Reporting (STER) Template, designed to enhance transparency, consistency, and comparability in the reporting of third-party expenses and pass-through costs across investment managers.
The template reflects extensive collaboration between global institutional investors and investment managers in response to market demand for clearer, more granular disclosure of costs charged to funds and ultimately borne by investors. Key enhancements include categorisation of third-party expenses, improved definitions and guidance, and improved structure to support efficient data exchange and analysis.
Improving Transparency and Comparability
The original STER was introduced by the SBAI in 2017 and was designed to enable institutional investors to track and compare fees, including soft dollar research costs, across alternative funds.
The revised template aims to refine disclosure standards, addressing remuneration, pass-through costs, and detailed operational expense sub-categories, including related parties to support more effective manager oversight and give investors clearer insight into the nature and drivers of costs.
Jane Buchan, SBAI Chair and Chief Executive Officer at Martlet Asset Management, said: “Our role at the SBAI is to bring the industry together to address shared challenges. This updated standardised expense reporting template combines a clear vision for greater transparency with practical guidance that supports consistent, comparable reporting that benefits both investors and managers. Strong collaboration and consistent reporting are essential to building a trusted and effective market for allocators.”
Adrian Sales, Partner & Head of Regulatory Affairs at Albourne, said: “At Albourne, one of our key roles is to help investors understand costs clearly. This updated template enhances the interpretation of third-party and pass-through expenses in a way that is consistent across managers.”
John Richardson, Chief Operating Officer and General Counsel at Ionic Capital Management, said: “After using the STER template for many years, we were pleased to be part of the working group that updated it to reflect the evolution that has taken place in the industry since the template was originally adopted. The updated template provides the additional transparency investors have been seeking, creating a stronger partnership between allocators and managers.”
The updated STER template reflects feedback from a broad range of market participants and is intended to evolve alongside regulatory expectations and industry best practice. Adoption of the template is voluntary but strongly encouraged to promote greater transparency and alignment across the industry. The template and accompanying guidance is below.
About the SBAI
The SBAI is an active alliance of over 150 alternative asset managers and over 100 institutional investors dedicated to advancing responsible practice, partnership, and knowledge. It advocates for an effective alternative investment ecosystem through robust standards and the exchange of ideas. For more information on the SBAI or to join the SBAI community, please contact [email protected] or visit www.sbai.org.
