Investment companies offering multi-manager products to their clients claim to be selecting and combining the best specialist managers for each asset class. Since this approach to investment management is attracting more and more institutional investors across Europe, IPE sent a questionnaire to companies offering multi-manager arrangements to find out which were considered to be the best managers.
We obtained responses from firms such as Frank Russell, Northern Trust and Global Asset Management (GAM), which have had their multi-manager products in the market for some years, to recently formed companies like London-based Attica Asset Management,which is now launching its first product of this type.
Although not all the respondents disclosed information about their manager line-up, those who did reply show that very few managers have been selected by more than one investment company .
However, there were some exceptions. Both Attica and Frank Russell have selected Sanford Bernstein for US equity. Escher UK, subsidiary of South Africa’s Escher which in March took over Superflex, the manager of manager fund operated by William M Mercer, and Frank Russell came to the same choice of manager for UK equity. Both companies are using GMO Volley in this asset class. GMO Volley was hired by Frank Russell in 1996 and is still running the company’s UK Equity Fund, along with Schroders, Fidelity, Barclays and Glasgow. Alliance Capital is present in two US equity funds, the Frank Russell US equity fund and the SEI’s US large caps and global developed countries funds.
Regarding Japanese equity, SEI and Frank Russell are both working with Scudder. In the case of SEI, Scudder is managing this region’s assets along with Martin Currie and Jardine Fleming which is also present in the Frank Russell’s fund. SEI’s Japan equity fund is part of the company’s Global Master multi-manager fund, launched last month. Martin Currie was also chosen by Attica for managing equities in the same area.
For the Pacific region Fidelity appears twice , chosen by two groups, Skandia and Frank Russell.
In terms of fixed income investing Credit Suisse manages the assets of SEI’s high yield fixed income fund and Attica’s global ex-UK bonds fund. In emerging markets, two groups, Frank Russell and SEI, are trusting to Nicholas-Applegate’s skills to manage this asset class.
When asked about manager replacements and the reasons behind those changes, only three respondents gave us some details. The most complete information came from Frank Russell, which stated all manager changes from the inception of the fund, but didn’t give any details about the reasons behind those replacements. GAM stated that about one quarter of the managers, those who coped least skillfully with the prevailing market conditions and volatility, are replaced each year.
This year, GAM replaced Scottish Widows with Edinburgh-based BlackRock, after the American manager poached SW’s European equity team. Northern Trust said it has replaced seven managers in the past five years as part of its ongoing procedures.

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