Liontrust is set to slam the door on new investment into its existing funds after admitting that rocketing inflows could seriously impede their performance within a matter of months.
Chairman Ellen Winser told shareholders last week that the fast-rising boutique's four investment processes can cope with £6bn before the chances of further outperformance are dramatically diminished. Given that Liontrust's assets under management shot up by 96 per cent to more than £5bn in the 12 months to March 31, this ceiling is likely to be hit before the end of the year.
Liontrust is expected to attempt to counter its capacity problems by launching three hedge funds to sit alongside the existing long-short product run by Jeremy Lang, manager of its flagship first income fund. The new funds, likely to be based on the firm's existing product range, would not eat into capacity, offering Liontrust one solution to its inflow difficulties.
Winser said: “We firmly believe there is a limit to the amount of money we can run. It is not in shareholders' interest for us to continue to grow funds under management willy-nilly.”