Investor's Notebook: Are active managers about to lose their lunch or their lives?
It is no accident that Old Mutual Corporate Consultants head Hugh Hacking favours the same spiky hairstyle as the boxing promoter Don King. Last week he organised, at a discreet hotel in Melrose Arch, a punch-up (at least in the verbal sense) between four colleagues representing active management, multimanagement and passive funds — as well as Old Mutual’s controversial smoothed bonus products. There weren’t as many punches as Hacking promised at the beginning.There was no talk of the notorious market value adjuster imposed by smooth bonus funds, which penalises pension fund members who have to leave before retirement during a bear market — just the people you would have thought these products should be protecting. And I know from my own experience how difficult it is for a retirement fund to disinvest from this product.It is rare to hear the case for active management, and Old Mutual’s revolved around the fact that the Edge 28 portfolio has significantly outperformed a neutral bala...
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