The record flows into AGEST have prompted the fund to review its manager lineup and in particular the fee levels agreed in initial contracts.

Michael Seton, the fund’s chief executive, said some managers have doubled or tripled the size of their mandates due to flows into the fund, but their fee levels have not changed. “Some managers have gone from a mandate of $50 million to $150 million but their fee levels might not have built in that scale,” he said. Lazard Infrastructure, for example was funded with $40 million, and that has nearly doubled due to some allocation of AGEST’s record inflows of $900 million for the year to June. Seton said the fund already had 35 funds managers, and while it would continue to look for new managers, it would also need to see some consolidation. “We need to look at the manager lineup and in particular the fee level,” he said. In the five years Seton has been at the fund it has grown from $400 million to $2.5 billion, with June 2007 seeing record monthly flows of more than $210 million. “These are amazing figures,” he said. “It is much more than we expected and puts pressure on our administrator.”