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Cazenove comeback with 1% annual fee

Cazenove Capital Management is aiming for a comeback in the retail fund of funds market with a 1 per cent annual management charge on its multi-manager fund range.

The company is predicting an environment with lower returns over the next five years and it regards a 1 per cent annual charge – on top of the charges of the underlying funds – as more appropriate in this climate than the 1.5 per cent market average. Four of its funds of funds are now available to IFAs through the Cofunds and Funds Network supermarkets.

The funds of funds were established in 2002 but withdrawn from the public domain as a condition of Cazenove’s agreement to manage a multi-manager fund range for M&G. This arrangement ended in July when M&G brought the funds back in-house, leaving Caz- enove free to market its own revamped offering.

To freshen up the range Cazenove changed the universal balanced portfolio into an absolute return fund benchmarked against inflation and renamed it the multi-manager diversity fund. This fund differs from the others as a non-Ucits retail scheme withexposure to property, hedge funds and commodities. It was felt that the wide investment powers of a non-Ucits retail scheme would be better in delivering returns using an absolute-return strategy than a pure equity fund.

The hedge fund exposure within the multi-manager diversity fund will come from funds of hedge funds rather than single manager hedge funds.

Cazenove director of fund management Richard Pursglove says: “We have secured capacity to add another fund of funds in December. The biggest problem in gaining hedge fund exposure is diversification. To research the hedge fund market is a time-consuming exercise so we will employ a multi-manager.”

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