Stock market downturns are terrible for asset managers. First, they must manage the drop in asset values in a way that justifies their fees to anxious clients and keeps the reputations of star fund managers intact. Second, they must bring in new money at a time when investors are wary of putting money into the market. It is hard to think to of a more difficult task.
- On the right side of the generalist/specialist divide
- Business has grown incrementally
- Has locked in long-term energy returns
- Private-equity buyouts look consistently profitable
- Rising interest rates to hurt asset values
- Windfall taxes on energy
However, while those with their savings in such funds may be having a mediocre time of it, investors in equities can snap up shares in fund managers at reasonable prices. In the context of fund management, the choice is either to go with one of the big established names, or to find a niche player that tries to differentiate itself from the thousands of funds that are doing approximately the same thing. Specialisation, combined with reasonable value, mean that investors should take a close look at the relatively unknown fund manager Foresight Group (FSG).