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billion of net income, CPP Investments directly and indirectly incurred $1,617 million of operating expenses, $1,449 million in investment management fees and $2,067 million in performancefees paid to external managers, as well as $427 million of transaction-related expenses. a leading financialservices company.
We're closely monitoring customer demand signals, and we'll continue to make important capitalinvestments in key major metros to capture this traffic growth. Chris, you said it was driven by a lot of sales or turn-up services to the state of California. I'm just trying to get a sense as to the right baseline.
We had a group that was doing small growth capitalinvestments in Germany and Switzerland at that time, a fund doing secondaries. And this isn’t dissimilar from what’s happened in prior eras within the financialservices sector. And the senior people were more specialized. We win when our clients win.
Management fees increased by $165 million, due to an increase in average assets managed by external fund managers. Performancefees decreased by $621 million driven by fewer realization events in the private equity portfolio given the low transaction activity through the year, partially offset by strong performance of hedge funds.
You know, that’s one thing in Europe where London was, I actually think, still remains the one place where you want to get exposure when you join financialservices. So when we started this strategy in 1718, and started allocating capital, investing in entrepreneurs who had a solution, that had to be massified.
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