posted 26th October 2020
Let us not underestimate the amount of work, responsibility and risk that the fund oversight function whether as an ACD or ManCo takes on versus the revenue it recieves from funds.
The fund oversight function is essential and crucial to the industry but for which the profit margin is much smaller than the fund managers which they provide services for. As a result the pressure on fund oversight functions are ever greater and without the neccessary scale required it can become a challenging enviornment.
Therefore we have already seen a number of potential mergers / consolidations to support a sustainable model and we believe 2021 will be no different as external host fund oversight functions seek to increase the AUM in which it manages with ever smaller margins, scale is the objective.
It will be interesting to assess at the end of 2021 the changes of the current 15 x external host ACDs in the UK...
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