Fund Capacity crucial for planning

Knowing your Fund Capacity is crucial for funds management planning and very useful when marketing for additional funds.

Understanding key Fund Restrictions enables sensible decisions to be made to increase the capacity of Funds Under Management.

The marketing and distribution team need to be very aware of which of their funds are at or over capacity and which ones have Surplus Capacity.

It is no surprise that marketing efforts will be focussed on driving inflow to their funds with ample Surplus Capacity.

Fund Capacity can be estimated

Fund Capacity is how large a fund can grow whilst still meeting its objectives.

Investment Funds are typically managed by a professional Fund Managers according to a set of pre-agreed objectives, investment style and restrictions.

Fund Objectives include:

  • Target Active Return
  • Target Tracking Error
  • Target Information Ratio

Fund Investment Style includes:

  • Fund Benchmark
  • Investible Universe

Fund Restrictions include:

  • Ownership Restrictions
  • Construction Restrictions
  • Market Restrictions
  • Manager Restrictions