Group looking to build up its range of multi-manager funds as part of its european push
Threadneedle is considering expanding its fund of funds range as part of its push to increase multi-manager operations in the UK and Europe.
The group, which currently offers four fettered fund of funds products, said it is looking at ways of adding to its range and may adopt an unfettered approach. Demand for these types of products is high on the Continent and the concept of multi-manager is growing rapidly in the UK.
Alan Ainsworth, deputy chairman at Threadneedle Investments, said while fund of funds have been available in the UK for some time, fund management groups are entering into broader multi-manager arrangements at a greater pace in the UK as open architecture selling becomes the norm.
Threadneedle has been working on its third-party sales partnerships as part of this drive, linking its funds to more than five life offices, as well as being a member of several fund supermarkets.
Ainsworth said: 'The trend towards open architecture is everywhere, although it is more advanced in Europe. There, it used to be that all our business came from intermediaries; now it mostly comes through banks.
'Banks and insurance companies felt that in order to hold onto clients in a growing equity culture where they were losing investors to asset managers, they had to offer a range of funds from different groups.'
In the UK's 1% world, life companies are also being pressured as these low margins have threatened persistency levels. In order to maintain existing clients, UK life offices have had to increase the range of investments on offer and, as such, most have added external fund links.
While admitting banks are likely to be one of the big winners from the FSA's depolarisation plans, Ainsworth does not expect the move to multi-ties and open architecture to push intermediaries out. 'This will be just another platform for advisers to make use of in terms of administration,' he said.
Intermediaries do not have the scale to effectively provide admin services so by using platforms like Cofunds or Scottish Widows they can offer clients a range of choices, with someone else dealing with the admin side of the business, he added.
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