Fofs favour soft closures

multi-manager

managers adopt hedge strategy by booking capacity in funds in case they close to new money

Retail fund of fund (Fof) managers are having to operate like hedge fund investors, booking capacity in portfolios in case they close. An increasing number of retail funds, typically from boutique firms, are closing when assets reach a certain level and this is creating problems for Fof managers who are trying to asset allocate. Selling out of a fund invested in a region the manager does not favour at the moment means when it comes time to switch an allocation back, the fund manager may not be allowed back in. This is leaving long-only Fofs facing a similar situation to funds of hedge...