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Risk-takers damaging investments – report

Risk-taking fund managers could be damaging investments, according to a performance expert.

Hay McBer Management Consultants director Neil McEwen spoke out at a fund management conference yesterday. He claimed commercial risks outweighed the potential benefits of basing fund managers bonuses on investment performance.

McEwen said: “If bonus structures remain unchanged, investment firms will continue to suffer all the downside risks of the risk-taking culture they are engendering” while getting less from the “potential upside of higher performance.”

McEwen also claimed investor cynicism meant performance statistics have become less of a factor in manager selection. He urged investment firms to change their bonus structures quickly and said those who may gain “competitive advantage.”


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