Two (Thousand) and Twenty: Developments in Asset Management Litigation

As managers have scrambled to protect their declining revenue streams in recent years, they’ve found solace from courts, legislatures, and independent fund directors. While the market generally appears to be driving lower management fees, fund directors and judges have done little to aid the process, even in connection with transactions resulting in a change in a fund's investment adviser. This paper addresses developments in excessive management fee litigation as well as suboptimal board practices utilized in connection with asset manager mergers, which present fund directors with an opportunity to leverage lower fees and other improvements for the benefit of fund shareholders. Fund directors should take heed and obtain value for shareholders when such opportunities arise.