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Cost-cutting sees over 130 funds close

A total of 138 funds have closed or merged in the past 12 months, research from Financial Express has revealed.

Among the firms that have made numerous changes to their range are New Star and Royal London Unit Trust Managers, with six each while Inv-esco Perpetual, Fidelity and M&G – who currently occupy the top three slots in terms of UK retail funds under management – have also made changes to their respective fund ranges.

Schroders managing director of UK retail Robin Stoakley says the figure reflects the pace at which asset managers have needed to cut costs in difficult markets, pointing to the fact that the number represents more than 5 per cent of the 2,000 funds in the unit trust/ Oeic space.

“This indicates just how difficult the past 12 months have been for asset managers across the industry. I would expect to see not only more fund closures but also more acquisitions.

“We have also seen acquisitions where changes to the fund management range have yet to take effect. However, I do feel the pace is set to slow.”

F&C recently announced proposals to merge eight funds into other portfolios run by the asset manager while a further shake-out is expected from both the Henderson-New Star and Aber-deen-Credit Suisse deals.

Chelsea Financial Services head of investments Matthew Woodbridge adds: “There has been a need for consolidation as there are too many funds at unsustainable levels and the markets have meant many fund managers have needed to tidy up.”

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