Funds Pooling
| Date: | December 2006 |
| Author: | Catherine Doherty |
| Price: | £500 to non-members of the Investit Intelligence Member service |
As the management of segregated accounts becomes ever more complex, and costs climb for fund managers and their clients, a debate is building in the investment industry on the case for pooling assets - to run them collectively in a way which would bring real benefit across the whole chain.
At the extreme ends of the investment industry - tracker funds and hedge funds - pooled products are the accepted norm, giving managers the ability to focus confidently on running one pool of money extremely well. But in the middle, firms tend to offer or even push clients into segregated accounts. Is this in the best interests of the clients and the firms themselves? Is the industry missing out on the benefits of economies of scale in pursuit of some other intangible good? And if so, is it worth it?
This report examines the differences between pooling assets and running them as segregated money and asks:
- Which types of pooling are being proposed, and for which client base? Are custodians and fund managers proposing different or similar products? Do the trends change across core/mainstream/high alpha investment styles?
- What are the tax and legislation barriers which make it difficult to get true pooling benefits from existing fund vehicles? What work is being done to get around these and to dismantle the barriers at a European level?
- How can pooling create a 'better; product for clients - can it run at lower fees, can it save costs behind the scenes, and can it produce better performance?
- How can pooling create a 'no worse' product for clients - how should client servicing factors be managed to overcome some of the historical objections to these products?
Table of contents
| Management Summary | 1 | |||
| 1.0 | Introduction | 3 | ||
| 1.1 | Background and scope | 4 | ||
| 1.2 | Paper aim and methodology | 5 | ||
| 1.3 | Diagrammatic primer | 6 | ||
| 1.4 | Terminology | 9 | ||
| 1.5 | Who’s who in the European pooling debate | 10 | ||
| 2.0 | Pooling Methods | 11 | ||
| 2.1 | Entity pooling | 12 | ||
| 2.2 | Virtual pooling | 14 | ||
| 2.3 | Pool cascades | 17 | ||
| 3.0 | Who is in the Driving Seat? | 19 | ||
| 3.1 | Client pooling | 20 | ||
| 3.2 | Multinational pooling | 21 | ||
| 3.3 | Fund manager pooling | 23 | ||
| 4.0 | Removing the Barriers | 25 | ||
| 4.1 | Taxation | 26 | ||
| 4.2 | Legislation | 32 | ||
| 5.0 | Pooling as a ‘Better’ Product | 35 | ||
| 5.1 | Costs | 36 | ||
| 5.2 | Access to investment services | 39 | ||
| 5.3 | Portfolio management | 41 | ||
| 6.0 | Pooling as a ‘No Worse’ Product | 43 | ||
| 6.1 | Vanilla vs bespoke | 44 | ||
| 6.2 | Reporting | 46 | ||
| 6.3 | Client management | 49 | ||
| 6.4 | Performance | 51 | ||
| 6.5 | Capacity management | 53 | ||
| 6.6 | The cost of moving manager | 54 | ||
| 6.7 | Freedom to choose custodian | 55 | ||
| 7.0 | Adding it all up | 57 | ||
<< Back to Member services page
- Press release - Investit and Stone House Consulting announce a strategic partnership
- Press release - Investment managers identify their priorities for the year ahead
- Press release - James Hockley returns to Investit as Business Director
- See all press releases, articles and event information here
Investit Intelligence Summer Conference 2010.
Read more here...
