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F&C predicts growth in Sicavs

F&C’s multi-manager team thinks that the growing popularity of sterling priced Sicavs with distributor status could lead fund management groups to reduce the number of funds they offer.

F&C says that now the IMA sectors can include offshore funds, intermediaries will become more comfortable with Luxemburg and Dublin-based Sicavs. The biggest hurdle for Sicavs has been their availability through fund platforms, but F&C says this is now changing, with access opening up.

F&C adds that a lot of fund management groups are launching Sicavs aimed at funds of funds and private banks rather than retail investors. It believes that broader acceptance of Sicavs will mean fund management groups no longer need to offer mirror funds and that eventually, depending on the success of Ucits IV from 2011, these companies may close down their Oeics in regional markets.

F&C head of fund of funds Dean Cheeseman points out that many offshore funds that are moving into the IMA sectors invest in emerging markets. He says many are excellent funds, but most intermediaries make relatively modest allocations to this area of the market.

He says: “An interesting twist on this is whether it is turning choice into choice’s sake. Do the majority of intermediaries know the difference between Latin America, Mena and emerging Asia? Is there the appetite for those funds among IFAs?

“It is great that the funds are there for us and our institutional colleagues, but on the flip side, it has never precluded us. We have invested in Sicavs that are not available to UK investors.”


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