FEAL case study looks at capacity issues for funds and managers

While institutional investors are well aware of capacity constraints on their funds managers, they are less aware of the intricacies of measuring and managing their own capacity issues.

The next Fund Executives Association Ltd(FEAL) case study aims to provide an in-depth look at the topic, including whether funds reach a stage when diseconomies apply. Tony Cole, the head of Mercer Investment Consulting, and Simon Eagleton, also of Mercer, will present the latest research on capacity problems at the events, to be held over breakfast on October 17 in Melbourne and October 18 in Sydney. Also speaking are representatives of three funds managers: Fidelity International, PIMCO and Eureka Funds Management. Eagleton said that, with some of the mergers which had occurred, some funds were getting to a size where their returns net of fees might decline with more assets to manage. His work included looking at the problems which funds faced gaining access to, in particular, alpha-generating investments. There were supply issues in property and infrastructure for very large funds, he said. Titled “The Art & Science of Managing Capacity”, the case studies are only the second such event undertaken by FEAL, which restructured its program calendar last year to provide more opportunities for in-depth discussions. A paper, prepared by Mercer, is to be distributed to registered attendees a few days prior to the event. The topic will address access issues and talent retention as well as the impact that different investment styles have on capacity. The sponsor is Fidelity. Info: www.feal.asn.au