Uncertainty forces groups to mothball fund plans

BlackRock has shelved plans for a resources fund while Resolution Asset Management is expecting a delay in launching its Argonaut European Absolute Return fund, in the wake of the events of the past few weeks.

Gartmore, meanwhile, has pushed back the start of the offer period for its European Absolute Return fund to next week (October 13) and has shortened the offer period from three to two weeks.

The fund, managed by Roger Guy and Guillaume Rambourg, now goes live on October 31.

“We’re still actively looking at it but clearly in light of market conditions you review the situation,” says Tony Stenning, the managing director of UK retail at BlackRock.

“There is no point in rushing into launching products right now. You’ve got to listen to clients,” he adds.

Toby Hogbin, the head of product development at Martin Currie, says that since absolute return and 130/30 funds rely on interaction with investment banks for the use of derivative, they are the funds that will face the biggest challenges in current market conditions.

He says: “The current turmoil in the investment banks makes the establishment of these relationships very challenging and therefore its probable there will be fewer launches of products of these types in the nearer term.

“The problem is, in these markets, investors will be looking for these types of strategy. So the challenge for asset managers moving into 2009 will be to deliver robust products to match investor needs.”