GLOBAL- Investments worldwide in multi-manager products are set to double to over US$1 trillion by 2007 according to proprietary data and analysis from the US research and consultancy firm Cerulli Associates.
Its report, due for publication next month, says multi-management is one of the fastest-growing sub segments of the asset management industry.
It estimates that approximately $489bn was invested in multi manager products at the end of last year, a figure that has grown at an annual rate of 15% since 1999. This compares favourably with the global asset management industry which grew 3% over the same period.
Most of this recent growth has emanated from outside the US, multi-management’s birthplace, and come largely from continental Europe which looks likely to drive future expansion. Cerulli estimates growth in non-US markets will be most robust at a projected 22%.
It says growth will increase for numerous reasons including:
o The demand for open architecture intensifying
o Non-U.S. investors continuing to diversify into equities and foreign asset classes
o New investors in less developed markets continuing to turn to multi-manager funds for advice and simplicity
o Asset managers seeking cost efficiencies to offset increased pressure on their fees and
o Pension reform and the development of European institutional markets benefiting managers of managers.
Fans of multi-management claim it offers benefits including lower risk and a diversification of managers, styles and asset classes. They also claim it represents an alternative means for asset managers seeking better global distribution.