Reuters Italia – An increasing number of traditional fund managers are capping portfolios to avoid diluting performance with inflows, taking a cue from fast-growing hedge funds, F&C AssetManagement said on Wednesday.
A number of funds such as Framlington Equity Income and J.O. Hambro UK Growth have sought to shut out fresh investors to preserve their high performance, and the trend is set to continue, F&C said.
The world’s $1 trillion hedge fund industry has influenced habits in the wider asset management sector such as by closing portfolios if performance is under threat, Tom Caddick, an F&C fund manager, told journalists in a business briefing.
“It seems the (traditional funds) are starting to follow the hedge fund route where houses are increasingly concerned about performance rather than chasing asset growth.”
Hedge funds have often seen performance wane rapidly when a flood of money has entered a relatively static market, as happened recently in sectors such as convertible bond arbitrage.
However in contrast to hedge funds, traditional portfolios can grow for years before a manager decides to curb new money, Richard Philbin, head of fund of funds at F&C, told the same briefing.
