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Half of top firms have funds under £50m

Advisers have raised questions over the efficiency of leading fund firms after research from Money Marketing found that almost half still run over 10 funds with less than £50m in assets.

The research, in conjunction with Financial Express, shows 23 of the leading 50 firms have funds under £50m. F&C tops the list with 25 funds under £50m.

Swip is second with 23 funds while Legal & General Unit Trust Managers, Skandia Investment Management and Credit Suisse Asset Management Funds UK have 19.

There are 1,215 funds under £50m across all IMA sectors.

F&C director, head of corporate affairs Jason Hollands says: “This is something we have been fully aware of but it is important to realise certain facts like a number of our products are still fairly new and are building scale. Some of our smaller funds are also mirror funds of products we offer offshore, so in terms of scale of strategy, etc, you need to consider these in their totality. Where funds are not running efficiently we will be looking at possible consolidation, as many firms will do.”

Hargreaves Lansdown investment manager Ben Yearsley: “That is an astonishing number of funds that are struggling to be profitable. I think it is essential for fund firms that such figures are addressed and with those numbers I am afraid that consolidation is inevitable.”

Informed Choice director Martin Bamford says: “It needs to be assessed, particularly at a time when fund managers are having their margins squeezed. They need to focus on their strengths.”

Financial Express research analyst Harpreet Sajjan says: “Downsizing seems set to become more prominent as the recession continues and one would not be surprised to see fund groups follow Schroders’ footsteps in streamlining their fund range to keep administration expenses at a minimum through these turbulent times.”

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