View more on these topics

Upping the ante

First State Investments has reignited the on-going debate over charges this week after the fund house announced proposals to raise the annual management charge on its £877m Asia Pacific and £183m Greater China growth portfolios from 1.5 to 1.75 per cent.

A number of firms have come under fire for taking the decision to up their fees, with capacity issues or a need to move in line with the market the usual rationale for the decision.

In this case, there is no exception as First State chief executive officer Charlie Metcalfe explains. He says: “We feel it is appropriate charging a premium fee on high quality funds that have limited capacity.”

The former part of Metcalfe¹s statement does hold water when you look at the performance of both funds, with Asia Pacific building a big adviser following under the management of Angus Tulloch. It has produced annualised returns of 15.54 per cent since launch although it is now soft-closed.

Meanwhile, the Greater China fund, which is managed by Martin Lau and Ho Hsui Mei, has produced a 28.61 per cent annualised return since its launch in December 2003.

However, some advisers are disappointed by the move, claiming that because the vehicles are fairly niche, firms can overstep the mark to claim extra funds in the knowledge that investors may not move due to the limited alternatives.

Hargreaves Lansdown senior adviser Ben Yearsley says: “They are taking in some £2.65m extra a year through the two funds in the knowledge that people will not be voting with their feet. I would be interested to see whether the Greater China fund is likely to close in the near future given the capacity issue raised.”

Elsewhere, it also appears to be a case of second time lucky for Premier Asset Management this week, after the group¹s senior management team announced through bidding vehicle Harvard Bidco, that the management buy out offer has now gone wholly unconditional.

After meeting opposition from a number of shareholders, the group managed to attain over 53 per cent shareholder approval by the second deadline on August 24, with the Harvard Bidco either acquiring, or receiving irrevocable assurances that it will acquire the best part of a further 25 per cent.

All this means that the group will now have a total of 78.22 per cent of shareholders supporting the move and has made a final offer to the remaining shareholders before the deadline on September 11.

Premier chief executive Mike O¹Shea says: “Despite the opposition we have had the offer has gone unconditional and we will look de-list from the AIM market.

“This is great news as we can move to bring this business forward in a number of directions.”

Recommended

FSA bans Liverpool IFA

The Financial Services Authority has stopped Michael Sheron from carrying out regulated activities after finding that he was not fit and proper to oversee or manage a business. Sheron was a partner at Sheron & Company Financial Advisers and was solely responsible for its day-to-day business. The FSA found that Mr Sheron lacked competence and […]

Aifa highlights gap between chartered and certified status

Aifa has criticised the retail distribution review for failing to recognise the gap in standards between certified financial planner and chartered financial planner status.The trade body’s second issue paper calls for closer examination of the credit systems for both qualifications.Aifa says to be a certified financial planner, candidates must belong to the Institute of Financial […]

Altmann says trustees need to diversify from equities

Pension consultant Ros Altmann says pension scheme trustees do not have enough experience of investing and have not received the right advice on where to invest.She is calling for trustees to receive more training and focus on appropriately diversifying pension schemes.Altmann believes trustees focus too heavily on equities and bonds and have become complacent because […]

Kensington and Chelsea through 100k level

The London borough of Kensington and Chelsea is the first area in the UK to break through the 100,000 level for average household earnings, according to Barclays’ latest wealth survey.Average household earnings in the borough are now 101,600, up 7 per cent on last year and over 20,000 higher than the next richest area.The cities […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment