Gauntletlaying Geffen goads FCA

Neptune CEO, Robin Geffen, has challenged the Financial Conduct Authority to make the disclosure of active share mandatory for fund groups.

Gauntletlaying Geffen goads FCA


The call adds further steel to the growing number of gauntlets Geffen has laid at the feet of the asset management sector in recent weeks in a bid to raise the level of debate about the true nature of active fund management. 

“This is fundamentally about transparency, on which the FCA has rightly put an emphasis in recent years,” he said, “ I believe that there remain in Britain financial institutions that have promoted active management products in their shop windows, while stashing billions of pounds worth of assets invested in closet-trackers under the counter. This damages active management’s reputation and leads us back into the hackneyed active-versus-passive debate when the real debate is between passive, closet-passive and truly active.”

Geffen went on to add that while he thought active managers would want to display this figure to highlight why investors pay a premium for their services, he said: “this is unlikely to happen unless the regulator insists upon it as part of efforts to ensure all customers are treated fairly. Otherwise, investors will remain unsure whether their specific investments are being managed in truly active strategies or not.”

The debate around active share has increased in recent weeks as Neptune and Threadneedle announced that they would disclose active share figures across their funds. This was then followed by an announcement by Woodford Investment Management, disclosing its active share.

However, not everyone sees the metric as a silver bullet on its own. Ben Waterhouse, head of UK retail sales at Fidelity Worldwide Investment said: “We already publish Active Share on our professional factsheets, alongside other key measures such as performance, volatility and risk.

“As a research led, bottom up house, Fidelity fundamentally believes in active management.  Active share is one of a number of useful measures which can help to assess the style of a particular manager. However, in our view, it shouldn’t be the single lens through which investors judge a fund.”

Brewin Dolphin’s Tom Jemmett added: “While we use the metric to asses relative diversification, we urge caution in using the measure in isolation when selecting fund managers, especially when focusing on the higher numbers.”


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