FF&P to move fund to managed account platform

Fleming Family & Partners is expected to move its FF&P Alternative Strategy Diversified fund of hedge funds onto a managed account platform, forming part of a trend already evident among asset managers

The board of the Guernsey-domiciled portfolio is understood to be considering this option after saying recently it was “in the process of considering the options as to the future of the company and the best interests of its shareholders”.

It added it would “make further announcements as and when appropriate”.

Fund manager Daniel Axmer declined to comment before the board came to a final decision for the fund.

It is understood a likely choice is to move the fund to a managed account platform.

FF&P has used managed accounts for around 10 years and it is not thought any move would impair the fund’s investment strategy.

The shift to invest more via segregated accounts would follow similar moves by industry heavyweights such as Man, EIM, Gottex and Permal.

Simon Peck, FF&P Asset Management’s chief executive in London, said investors preferred the managed account structure for offering good liquidity, and because “offshore funds tend to be rather less transparent than managed account platforms”.

He said there were enough managers on platforms now not to damage returns or manager quality by their use.

Some investors have historically expressed some concern managed accounts offer such ample liquidity that investing in longer-term investments could be difficult.

However, Peck said his unit could already invest in asset classes such as private equity and credit directly – so it did not need a fund of funds vehicle to do so.

Peck added the mainly onshore investors in FF&P’s fund were also interested in moving “because we were particularly concerned and did not think the tax rate of 50% that applies to offshore open ended companies was an attractive one to pay on returns.

“We would like to find an alternative solution subject to capital gains tax, not income tax. Losing half your return to tax is quite a high penalty in a world where returns may not be as large as they were in the past.”

David Walker

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