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Client types will be gradually merged

Multi-manager round table: reports by Matt Goodburn

Credit Suisse multi-manager co-head Gary Potter believes the drive for increased performance and tax efficiency will lead to a convergence of retail and institutional client types in multi-manager and fund of funds over the next few years.

Potter said: “We will see a gradual coming together of client types. There will be a blurring of boundaries, with high-net-worth bankers and small pension fund managers all looking for higher performance. Five years ago, there was a distinct retail business for IFAs. The fund of funds product has been very tax-efficient and now we are seeing private banks and stockbrokers recognising that a fund of fund structure makes the tax situation easier.

“You have institutional business on the left, retail on the right and stockbrokers in the middle, all reorganising to the multi-manager solution. It is pervading the whole spectrum.”

Gartmore fund manager (multi-manager) Marcus Brookes said he expects many multi-manager propositions to start employing more non-traditional assets such as property, offshore funds and hedge funds.

Christows head of fund research Dan Kemp said he thinks clients will become more familiar with the multi-manager proposition.

He said: “There will be much more understanding from our clients about what we do. There will also be greater differentiation, with a lot more products and choice and a lot more players in the space.”

Jupiter director of multi-manager John Chatfeild-Roberts said some multi-manager outfits would not survive the next five years due to the increasing need to scale up.

He said: “Artemis decided it did not have enough scale two years ago. If you look back three or four years, £100m may have been enough but not now.”

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