Does investing in asset managers still make sense?

Long seen as leveraged plays on the market, asset managers' improving cash positions may give them more defensive qualities as they face up to a changing fund management landscape.

Managers including Troy's Francis Brooke and Lindsell Train's Nick Train are among those who have bought into selected fund groups in the expectation strong balance sheets will help groups withstand the headwinds of a risk-on/risk-off equity market. Central to this theme is Aberdeen, a recent entrant into the FTSE 100 described by Brooke as a "cash machine". Richard Watts, manager of the £750m Old Mutual UK Select Mid Cap fund, holds 3.1% of his portfolio in Aberdeen, making it the one of the largest positions in the fund. Watts estimates the group will almost double the cash on it...