16 1
The manager
What to deduce from a manager’s set up
Office space and business organisation
Some managers’ or advisors’ offices are so extravagant that they make
headlines! This is rare but an office can tell you about the style of busi-
ness management you may be getting involved with. Investors need
to understand how managers or advisors establish themselves. This
can reveal certain attitudes that can reflect more or less well on the
way the business is run and the consequences this could have for your
money in the relevant fund.
Managers in London for example are going to be in or around afflu-
ent areas such as Mayfair. This is where some of the earlier managers
started and the area has become a magnet for the rest. Although it is
fine to have this concentration of talent in one area, anyone spend-
ing an inordinate amount of money on their office lease to be in this
location may not be showing the greatest business sense. I like to visit
an office and work out whether it is commensurate in stature with the
size of the assets of the relevant fund or client base.
Most managers or advisors should have insurance cover, especially
professional indemnity (a.k.a. errors and omissions) insurance. This
insurance would give them protection against claims for potential mis-
management of the fund’s assets. This is significant as the assets in
the fund and potential losses are usually many multiples of the assets
available to the manager or advisor through its own capital. Taking
out insurance cover is not however a legal requirement. Unlike other
professionals (such as lawyers) whose regulatory bodies may require
some minimum level of insurance this is not the case for managers.
Where managers do have insurance cover, as an investor you should
ask for evidence of this, especially as the level of cover may vary
widely. Although there is no real benchmark that could help deter-
mine what an appropriate level of professional indemnity insurance
should be, most firms would tend to have enough insurance cover to
insure up to 1 per cent of the overall assets they manage.

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