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Credit Suisse slows the merry-go-round

Credit Suisse Asset Management says the underlying funds chosen for its multi-manager cautious managed fund at launch in 2001 have experienced a lower-than-average level of manager turnover.

According to the UK Fund Industry Review and Directory 2004/2005 – the most recent edition – more than 75 per cent of UK fund managers have been in charge of their funds for less than four years.

Credit Suisse says 61 per cent of funds in its multi-manager cautious managed fund have seen changes in management.

Director of multi-manager Robert Burdett says the fund manager merry-go-round is due to the sacking of fund managers to save costs during the final year of the bear market, the poaching of managers by rival firms and managers setting up their own boutiques. He says part of the multi-manager’s role is to identify problems ahead of departures.

Burdett says “If you have been interviewing fund managers for 20 years, like Gary Potter and I have, you can feel less certain about a fund manager staying if you have had a face-to-face meeting. Hopefully, we do avoid the more obvious cases where unhappiness might come across.

“In a fund of funds, investors have a gift-wrapped portfolio service. We do not pay an initial charge or capital gains tax where one fund is sold and another is bought.”

Insight multi-manager co-head Patrick Armstrong says: “We assess managers on a case-by-case basis but, as long as you keep on top of it, it is not a problem. Individual clients switching funds would have to pay capital gains tax but we do not.”

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