Cazenove has criticised the IMA for not bringing “vital clarity” for investors after the trade body decided against making changes to its Absolute Return sector for at least another 12 months.
A number of asset management groups have been vocal in demanding change to the burgeoning sector, with the inclusion of offshore funds taking the total number of vehicles in the classification to 48.
Many firms have called for a sub-division of the sector, which is home to a number of different strategies and varied objectives.
"There was considerable discussion about sub-categorising the sector, but it was felt that the sector was not yet sufficiently large or mature enough to do so," IMA director of markets Jane Lowe says. "The aim of delivering an absolute return in a rolling 12-month timeframe remains a major focus."
However, Cazenove managing director of investment funds Robin Minter-Kemp says there is an urgent need to improve clarity in the sector.
"At the moment the sector is filled with various strategies and funds with differing levels of risk," Minter-Kemp says.
"They say people should not compare funds in the sector, but the majority of people still will do this. They should either create sub-sectors which will enable comparison to take place, or ensure volatility levels are clearly defined."
But Threadneedle head of wholesale Gary Collins can understand the IMA's stance.
"With the amount of funds continuing to come to the sector, I would estimate it will be home to 70 funds in six months time, I can see why the IMA is cautious," he says.
"If we wait until more funds come in, it will make carving out the sector much easier. Hopefully they will look at it again in six months time.
"Personally, I would like to see those funds targeting cash plus 300bp to be in one sector, with those aiming to deliver an 8%-10% return in another sector. They all must also reference volatility."
The IMA says further review of the sector will take place in 12 months' time.
