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Diversity is the key to FundLogic Alternative says Morgan Stanley’s Sadique

August 29, 2010
- 12:03 pm

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As investors continue to see the benefits of UCITS, so the number of platforms to facilitate fund growth expands.

As investors continue to see the benefits of UCITS, so the number of platforms to facilitate fund growth expands. US banking giant, Morgan Stanley, who themselves have been running FundLogic since 2006 to manage their structured funds, have now joined the party by launching FundLogic Alternative. It was approved four weeks ago by the Irish regulators. As reported last week, P Schoenfeld’s Global Events Fund became the platform’s first newcits, and according to the ED and Head of FundLogic, Shahzad Sadique, the onboarding pipeline is very healthy: “We have two more funds with the regulator that we hope will be launched within the next two to three weeks. One is in Europe, the other in the US but we’re looking to onboard globally. In six months’ time we hope to have around six managers.”

In the next twelve months, Sadique expects FundLogic Alternative to have EUR1-1.5 billion in AuM, which would put them on a par with BoAML’s MLIS platform in terms of size. However, onboarding tens of managers just to build up assets isn’t the bank’s primary objective. “Our strategy is to pick from best-of-breed managers,” says Sadique. “We look at each manager from a quantitative and qualitative aspect along with his strategy. So the focus will be on building a diverse manager platform with different investment strategies. Diversity is the key.” As investors become more comfortable with UCITS Sadique believes there will be a barbell approach to investing; one end being cost-efficient ETFs delivering beta, the other end being new UCITS with their higher fees and alpha performance. “At the end of the day, people want absolute returns but in a regulated format and UCITS fits the bill.”

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