James Sullivan, head of partnerships at Tyndall, said: "It has always been a bittersweet experience for any firm that has been fortunate to harbour a star-name fund manager; their high personal profile can help attract meaningful assets, but the key-person risk and distortion of asset gathering has always been a cause for concern.
"There is little doubt that from both sides of the camera (asset managers and the buyside) the perception of the so-called star manager is not what it once was.
"Where they do still exist, it is imperative that guardrails are erected around them to ensure they adhere to appropriate levels of governance and cannot stray from objectives, whilst asset flows should be measured and monitored to ensure they remain suitable for the liquidity profile of the mandate.
"Many firms prefer to adopt a team-based approach where possible, diluting any one significant influence over assets.
"We have experienced before that where assets lead, egos follow, and no one wants to create a monster. At such point it can be hard to row back.”
Crispin Odey’s entanglements with regulators have been going on for more than two years, and may have a long time to run yet, but for advisers and their clients there is much to ponder about the risks of investing in firms where one outsized personality dominates.
David Thorpe is investment editor of FTAdviser
