fund of managers product will be run with a concentrated mix of just two fund managers
Northern Trust is to bring out a UK high alpha fund of managers and seed it with in-house money.
The portfolio is due for launch in the first half of 2003 and is designed to appeal to consultants who allocate client funds to core and satellite mandates.
Tony Earnshaw, managing director of multi-manager products, said the portfolio will contain a concentrated number of managers.
'There will be a smaller mix than usual, just two managers, which will help to get higher alpha,' he added. 'If there are more managers, there is a danger of spreading too thinly.'
Earnshaw believes that for those who do not want to use multi-manager as a core holding, the high alpha fund will be acceptable for satellite exposure.
He said: 'We wanted to offer more of a choice. For retail distribution opportunities, we feel this will be a good fit.'
Northern Trust has also completed the process of converting its unauthorised Dublin-based unit trusts to an Oeic.
The group has applied for a Ucits passport for the Dublin Oeic, which Earnshaw hopes will be approved in February. This will enable it to offer the Oeic to the Continental market, part of a plan to expand its distribution into Europe
Earnshaw said: 'We are talking to various distribution partners in Europe with the intention that future agreements will be based on these funds.'
In addition to the Oeic, which has six equity and five bond sub-funds, the group has set up a unit trust umbrella, Northern Trust Multi-Manager Managed Funds.
Under this banner are three funds of managers, Balanced, UK/World Equity fund, with a 50/50 split between the two, and International.
All three are targeted mainly at defined contribution pension funds.
In addition, there are two portfolios available only via Scottish Equitable ' the group's Balanced and Stockmarket portfolios.
Northern Trust aims to broaden its distribution network away from its previous focus on institutional clients.
'We will also look to distribute the funds to offshore, retail and high net worth clients,' said Earnshaw.
The group agreed a distribution deal with a private wealth group last month, although it can not yet reveal the identity of its new distribution partner.
Earnshaw said the other organisation will be providing a multi-manager service, record keeping and other services to its offshore private wealth clients.
The multi-manager offering will consist of a range of risk-graded funds, with the underlying investments a mix of the existing bond and equity funds that sit under Northern Trust's Dublin-based Oeic.
More details of the deal will be announced later this month, Earnshaw said.
Partner Insight: Continuing the Architas education series for clients.
What made financial headlines over the weekend?
290,000 already affected
Putting the tech into protection
Square Mile’s series of informal interviews