Buyers flag key man risk concerns despite asset manager action

Follows departures of high profile 'star managers'

The threat of star manager departures remains an important factor for fund buyers, despite asset management firms taking steps to mitigate this risk.

According to a recent report from Moody's Investors Service, entitled Asset Managers Aim To Lock Out Key Person Risk, providers have been placing more emphasis on repeatable processes, as well as the team culture. They have also been focusing on succession planning, knowledge sharing and equity incentive plans. Some of the practices employed include giving managers appealing incentives to stay at the firm, such as equity ownership, and harsher penalties if they choose to depart. Due diligence Despite these efforts, fund buyers still believe a star culture remains prevalent in the in...