FT Adviser: How multi-asset wrapped up the funds market
Ben Willis, senior investment manager for Whitechurch Securities, explains making and managing a multi-asset fund is “not straightforward”. For a start, he says, getting the assets in to make it commercially viable is “just one hard part”.
He says: “The actual setting up of a fund is not cheap – anywhere between £50,000 to £150,000 in the first year alone.
“An authorised corporate director (ACD) has to be appointed, and these usually take care of all the administration, trading and regulatory requirements.”
Once this has been agreed, Mr Willis says the next hurdle is actually marketing the fund and attracting more assets – which can be hard when there is no track record to rely on.
“In addition”, he says, “charges on small funds are much higher due to the fixed costs of an ACD. This is a catch-22 situation in this cost-conscious world, as to lower the fund costs, the fund has to attract assets, but investors won’t invest in a fund with high charges.”
He believes a fund should get to around the £50m stage to start being truly profitable for the fund managers, and the costs need to be roughly on par with the peer group.”
Full Article at: FT Adviser - How multi-asset wrapped up the funds market
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