Duo going where financial advisers now fear to tread
Funds-of-funds have broken the £1bn barrier for the second quarter this year as respected retail managers get in on the action.
I have never really been a big fan of funds-of-funds.
Maybe I was scarred by my first experience of these vehicles in the late 1980s when I was a cub reporter at Money Management magazine and I came across ‘unfettered’ and ‘fettered’ funds-of-funds schemes. At the time they looked like a recipe for the investment community to take yet more charges from the investing public – and they were exactly that.
Yet I have experienced something of a Damascus Road conversion on funds-of-funds. Although the issue of double charging is never far away, the investment concept is here to stay. And it is proving extremely popular with financial advisers and investors alike.
The latest statistics from the Investment Management Association confirm this. Net retail sales of funds-of-funds for the second quarter of this year broke through the £1bn barrier. Their share of total retail funds under management now stands at nearly 11 per cent and some £64bn of investors’ money sits in these funds.
Indeed, some of the most respected fund managers in retail investment are now funds-of-funds managers, the likes of John Chatfeild-Roberts at Jupiter who, incidentally, believes inflation is about to shoot through the roof and the under-stated (and quite brilliant) Martin Gray of investment house MAM.
A week ago, I was privileged enough to spend an evening in the company of Gary Potter, one half of one of the best funds-of-funds investment teams in the past 20 years. The other half is Robert Burdett.
Since 1992, this formidable duo have been operating in tandem in the multi-manager space, first at Rothschild Asset Management, then Credit Suisse and now Thames River Capital. The latter has since been absorbed into F&C Investments and I would not be surprised if a rebrand to F&C is not far away. Despite all the chopping and changing, the marriage between Mr Potter and Mr Burdett seems to be thriving. If only all marriages were so rock solid.
Mr Potter was speaking at a meeting of the Cellar Club, a ‘club’ comprising an eclectic mix (young and old) of successful independent financial advisers drawn from across the Midlands who meet from time to time in order to chew the cud.
The cud is always chewed in convivial surroundings, normally at Simpsons Restaurant in Birmingham. But this time it was held at the Inn at Stonehall in Worcestershire, a splendid venue owned by Joanna Coull, a member of the Cellar Club, and an adviser with Coventry-based Hutt Professional (by the way the venue is open for wedding receptions, wakes and parties so check it out at innatstonehall.com.)