Fund manager financial strength critical for investment choice – Tyndall
The financial strength of a fund manager is as important a criterion as investment skill for adviser investment choice in the current market, according to Tyndall managing director Brett Himbury.
“This is a really tough environment for all businesses, fund managers included [and] potential manager’s financial strength cannot be overlooked by advisers on behalf of their clients,” he said.
At a “time when revenues are clearly under pressure”, advisers who focus solely on the investment skill of a manager do so at their peril, Himbury said.
“They must establish if a manager is making a profit, has a diverse revenue stream, and has adequate resources in place to manage client servicing requirements — as well as making sure the investment professionals are entirely focused.”
Himbury emphasised that he was not targeting boutiques by issuing this warning, as boutiques “can be as financially strong as corporates”.
“Rather, it’s simply a question of advisers making sure the manager [can] add value to client investments in this type of market.”
Recommended for you
Platinum Asset Management has provided an update on the possibility of a merger with asset manager L1 Capital following a period of due diligence.
Commentators may be forecasting consolidation in private market firms but a survey of the industry itself expects new manager formation will still outpace this, especially in Asia Pacific.
Fund manager Pacific Current has appointed a former superannuation chief executive as its newest chair, succeeding Tony Robinson who departs after almost a decade to focus on his role at COG Financial.
The possibility of a private credit ETF is looking unlikely for now with US vehicles seeing limited uptake, according to commentators, but fixed income alternatives exist that can provide investors with a similar return.
