A) You need to build up to capacity, so you've got a multi-billion dollar fund already by that point that is charging low fees and presumably doing very well. You just close it to new business until outflows make space.

B) You can win major plaudits by lowering client fees. Guess what - when investment performance inevitably goes through a bad patch the client will stay with a manager they like for a lot longer than one they don't. That gives you time to recover performance and avoid a yo-yo effect.

If your manager is telling you that you need to pay high fees because they're popular you are being ripped off.