How much does manager alignment of interest add to fund returns?

Alignment of interests

Managers investing in their own funds can add as much as three basis points to returns, according to a report by New City Initiative (NCI).

The report 'Alignment of Interest- How culture defines boutiques' examined how owner-managed small- or medium-sized boutique active asset managers can drive superior service and risk-adjusted outcomes for investors. It highlighted the prevalence of ownership stakes in funds by managers in smaller firms and said this could have a positive impact on performance. NCI urges FCA to expand 'Project Innovate' to asset managers The level of return increase by managerial ownership was found to be three basis points per each basis point of managerial ownership.  "Ownership stakes in funds...