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Cerulli points to change: future lies with manager of manager products
Manager of manager products may gradually replace fund of fund arrangements in the retail sphere, according to the latest research conducted by Boston-based consulting firm, Cerulli Associates.
According to Cerulli’s research, titled Global Multi-manager Products 2005, global manager of manager products grew by 32 per cent last year, compared to 28 per cent for fund of fund assets.
It said that while a part of the reason for the shift was cyclical, long-term factors were also at play as regulators frowned on fund of fund products and their layers of fees and, in a bid to recapture margins, savvy distributors used devices such as manager of manager products, and their lower component costs, and separate accounts as replacements.
Looking at the cyclical nature of the issue, the Cerulli research said Europe, which had traditionally represented the largest market for fund of fund products, had suffered from the malaise that had gripped the region’s equity funds over the past four years.
Looking ahead, the research said the US continued to represent the lion’s share of multi-manager assets, accounting for more than US$300 billion of manager of manager assets and US$156 billion of fund of fund money.
It said growth in multi-manager assets appeared concentrated in a few key marketplaces, with Japan’s assets having swelled by 144 per cent, albeit off a small base, while the much larger United Kingdom multi-manager marketplace had expanded by more than 64 per cent.
The research said that together with the US and Spain, Australia had also seen its multi-manager assets grow faster than the global average.
AUTHOR
Mike Taylor
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