Understanding Multi Manager?

A multi-manager investment is a strategy that invests in numerous funds controlled by other specialist fund managers. This combines the styles and expertise of several investment managers. It is designed to minimise risk and exposure to any one fund manager, particularly in fluctuating market conditions.

With some multi-manager funds, you are able to select the mix of your investments; in others, the mix of assets is chosen for you. The key is that multiple investment managers are investing within those asset classes on your behalf, drawing on their own specialised processes and expertise.

Multi manager investments provide all the benefits of managed funds, as well as the advantages of:

• Extra layer of risk management - the multi-manager can be likened to a conductor in an orchestra. All the musicians in the orchestra are specialist experts in their own right, but the conductor brings them together for the benefit of the overall portfolio.
• Monitoring managers - the multi-manager keeps close tabs on each manager, conducting regular face-to-face reviews and ensuring that they stay true to their investment strategy.
• Hiring and firing managers - not only will a multi-manager hire and fire managers on your behalf, all the transaction costs of moving securities are covered.
• Scrutiny of managers - Multi-managers have their own specialised monitoring systems to evaluate the people, processes, portfolio and performance of each underlying manager on an ongoing basis.
• Convenience - Multi-manager investments allow investors to keep tabs on an entire investment portfolio with just one investment.
• Affordability - With a large investor base, multi-managers are able to access volume discounts from underlying managers and pass on these discounts to investors. As a result, multi-managers tend to be price competitive with single managed funds.