Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

DFM to close ‘stellar’ in-house fund over conflicts of interest

DFM to close ‘stellar’ in-house fund over conflicts of interest

, the , is to shut an internal fund of funds so that its discretionary fund managers do not allocate to their own products.

The group acquired Blacksquare’s Acumen Defensive Portfolio fund earlier this year, which is managed by Christopher Peel and invests in other funds including Odey Absolute Return and Ruffer Total Return.

Peel (pictured) has now become Tavistock’s chief investment officer, acting as one of six discretionary fund managers for the firm, and one consequence of this will be the closure of Acumen Defensive.

‘We don’t feel it is appropriate to be investing clients’ money in our own funds,’ he told Wealth Manager.

‘It’s a pity we’re shutting it but we can’t in good faith allocate to our own product.’

Acumen Defensive has returned 11.2% since inception in 2010, while its benchmark Ucits Alternative Funds of Funds index has lost 9%, a performance record that Peel described as ‘stellar’.

But as well as closing that fund, Tavistock will be launching two new funds this month: Acumen Conservative and Acumen Progressive. Both will be passive-only strategies.

‘The rationale for launching the two new funds is really to deliver cost savings,’ Peel explained, as it was cheaper to deal in exchange-traded funds for clients through a pooled vehicle than individually.

‘I’m surprised the FCA hasn’t investigated the cost of those dealings,’ he added. ‘It gets swept under the carpet.’

Both of the new Acumen funds will have annual management charges of 0.75%, and estimated ongoing charges of 1.16%.

In March the FCA revealed that it would launch a probe into how wealth managers use in-house funds.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Related Fund Managers

Christopher Peel
Christopher Peel
39/140 in Mixed Assets - Balanced GBP (Performance over 3 years) Average Total Return: 14.21%
Citywire TV
Play Boutique tapes: my business will never be sold

Boutique tapes: my business will never be sold

In the final part of our four part series we discuss consolidation and whether it's getting tougher for boutiques to survive.

Play Boutique tapes: are top managers better off at small firms?

Boutique tapes: are top managers better off at small firms?

In episode three of our series, boutique bosses discuss whether the best fund managers are more likely to thrive at smaller firms.

Play Boutique tapes: if you want a Ferrari, you have to pay for it

Boutique tapes: if you want a Ferrari, you have to pay for it

In the second part of our four-part series, boutique bosses are asked how they can justify the fees charged by active managers.

Read More
Your Business: Cover Star Club

Profile: how this boutique beat the big guns of wealth

Profile: how this boutique beat the big guns of wealth

This small west country offshoot of a local IFA scooped a 2018 Citywire award from beneath the noses of the national challengers

Wealth Manager on Twitter