“A number of funds of funds have disappeared so there are fewer smaller players; effectively it’s consolidation, but rather than being taken over by larger firms, the smaller firms have simply closed down,” he said.

“The main reason for this is the requirement of operational due diligence and the costs that entails. You now need to operate on a much larger scale than say five years ago, when $250 million of AUM was adequate for you to run a reasonably profitable fund of funds business. It is certainly north of $500/600 million, or possibly even $1 billion, for you to be comfortable in the space now.”