Segregated mandate assets set to double

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Segregated mandate assets set to double

Assets under management in segregated mandates are likely to more than double by 2020 as regulatory and margin pressure takes its toll, according to Heather Hopkins, who until recently was head of Platforum.

Ms Hopkins has founded NextWealth, a research and consultancy firm for the asset management industry.

She has also become a director of Clive Waller Consulting.

Ms Hopkins said the first piece of research carried out by her firm has revealed that an estimated £86bn of retail assets are currently held in funds managed as segregated mandates by wealth managers.

She added that NextWealth forecasts the market for wealth manager and discretionary fund management (DFM) segregated mandates will grow to £180bn in the next two years.

This represents a more than doubling of assets and, according to Ms Hopkins, will have a profound effect on the margins for asset managers.

Segregated mandates happen when a wealth manager places client capital with an investment manager, but rather than place the capital in an existing retail fund, the wealth manager agrees to pay lower fees and the assets into which the segregated mandate can invest are likely to vary from the retail fund.

St James's Place has a number of segregated mandates, including one with Neil Woodford, and as FTAdviser has previously reported,  Brewin Dolphin has also announced it is to move to segregated mandates for its managed portfolio service as it now has sufficient scale to do so.

david.thorpe@ft.com