The Battlegound for UHNWs Intensifies

Stephen Harris

19 July 2005

The battle for the ultra-high net worth market is being lost by mutual fund managers who are increasing loosing out to hedge funds, according to Robert Schulman, chief executive of Tremont Capital Management, a hedge fund subsidiary of fund manager, Oppenheimer Funds. Tremont Capital Management has about 2,000 ultra-high net worth clients all of whom own mutual funds as well, according to Mr Schulman who has warned that hedge funds are going after the richest clients of mutual fund firms as they expand their operations. According to Mr Schulman, hedge funds have an historic opportunity to use mutual funds’ excellent distribution channels to increase their assets under management. He has suggested that asset managers should protect themselves by leveraging their excellent distribution capabilities, to get hedge funds into the investment portfolios of their clients. Unless mutual fund companies get to grips with the conundrum they will have to settle with offering their services to an ever-declining pool of investors, while at the same time hedge funds would continue to woo some of their best clients, said Mr Schulman.