Strangled by red tape fear for fund firms

THE Government must slash red tape preventing new fund managers from setting up or risk an industry exodus, experts have warned.

- By Simon Hunt

The rate of new fund management businesses being created has dropped precipitously in recent years as high barriers to entry have pushed too many entrepreneurs away from the industry, according to a report by Peel Hunt, Hill Dickinson and IIMI.

"The market has lost much of this energy as lowering fees, aversion to career risk and large allocation requirements have eroded the viability of making investments into newer and smaller funds," the report says.