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CSAM looks to boutiques

Credit Suisse Asset Management has established the CS Multi Manager incubator fund to take advantage of the flexibility offered by non-Ucits retail schemes.

As a non-Ucits fund, this can invest in unregulated funds and although it is likely to have a UK bias, it can invest in any country .The fund will aim for growth by identifying and fostering unrecognised talent. To do this effectively, it will invest mainly in funds with total assets that do not 100m at the time of investment. In practice, these may be small unknown funds that are run by experienced managers or which have been overlooked in a crowded sector.

CSAMs funds of funds business is headed by Robert Burdett and Gary Potter who have worked together for 10 years. When looking for future talent, CSAM will use a network of contacts built up over last 20 years and will conduct extensive research to find new fund ideas early. This may involve finding experienced managers that may have moved from one company to another or are launching a new fund.

The new fund will use the same investment process as the other multi-manager funds in the CSAM range, but will be limited in size to enable stakes to be taken in smaller funds without needing to own a huge chunk of the underlying assets. Many of the underlying funds will be less than two years old and less than 50m in size.

According to CSAM, one of the advantages f investing in small and new funds is that the manager may be trying to build up a track record rather than living of an established one, so he or she will be more focused on outperformance.

However, many IFAs prefer to wait until a fund has built up a track record of at least three years and may be unwilling to recommend this fund because the underlying funds will be lacking in this respect.

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