Fund consolidation set to continue: IMA

Fund rationalisation is expected to continue in the near term after the number of closures and mergers last year climbed to its highest level since 2005.

The IMA’s annual asset management survey revealed 229 funds were closed or merged away last year, a 45% increase on 2008. In addition, the amount of fund launches fell to 153, a 41% drop on the previous year. The net reduction of 76 vehicles in 2009 was the largest decline in overall fund numbers since 2003. Using figures from the last severe market downturn 2000 to 2003 as a guide, the IMA says there is a time lag between weak market performance and fund launch and closure activity. “If a similar pattern were to emerge during the current market downturn, then some consolidation at...