Funds over £3bn in size risk "blowing up" if groups do not alter their practices to incorporate changing ‘AUM quality' and other risks, according to industry consultant Roland Meerdter.
Meerdter (pictured), founder of US consultancy Propinquity Advisors, said ‘blockbuster' funds - defined as those with more than $5bn (£3.2bn) in AUM - could jeopardise investors' money if groups do not recognise the dangers of running larger portfolios. "Behemoths carry significant risk," he said, speaking at Investment Week's Fund Management Summit in London. "There is the danger of a massive collapse in a downturn, especially if a large shareholder sells out, prompting other investors to do the same." Meerdter added there is a risk managers used to running smaller portfolios can...
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