The curse of the specialist manager

MANAGEMENT STYLE

Ian Lance, portfolio manager at RWC Partners, discusses the disadvantages of choosing a fund manager with a narrow investable universe.

I recently noticed 12 fund managers from 12 different firms representing 12 asset classes giving their outlook for 2011 on a well-known financial website. What stood out to me was all 12 were positive about their own asset class, which either means correlation is moving back to one (but this time on the upside) or more likely, suggests these outlooks were aimed at generating flows into their own funds. As most fund managers’ rewards are still a function of their assets under management and fees, individuals are motivated to keep increasing the size of the their funds (even if this is det...