Hong Kong, Jan 10: Demand for multi-manager funds is increasing in Asia and has been a fast-growing

Hong Kong, Jan 10: Demand for multi-manager funds is increasing in Asia and has been a fast-growing area of fund investments globally as investors seek better returns, a top HSBC fund manager said on Wednesday.

Unlike single-manager funds, multi-managers employ an investment team to look after clients' assets.

Multi-manager products took off in the last five years, with asset managers and consultants including HSBC, Mercer, Credit Suisse, Aon and WestLB all jumping on board, said Joanna Munro, global chief investment officer at HSBC Investments, the fund management arm of Europe's biggest bank, HSBC .

''Increasingly, as you're wanting a broader asset allocation, you're wanting to invest in high-yield structured products, hedge funds, property. Chances of one asset manager being able to do it for you becomes very remote,'' Munro told Reuters.

''What you need is experts in each part of your portfolio and you are already in a world where you want multiple managers.'' Munro said a number of multi-managers were also trending towards more innovative products, including absolute return oriented products that have a broad range of asset classes, such as property, private equity and emerging markets.

Assets under management for multi-manager funds totalled $1.3 trillion in 2005 globally and are expected to grow at a compound annual rate of 16 percent between 2005 and 2010, according to asset management research consulting firm Cerulli Associates.

In Asia ex-Japan, the figure was $14 billion in 2005 and projected to grow to $33 billion by 2010.

HSBC launched two new fund of funds in Taiwan last year to strong demand and is planning to offer a new one in Hong Kong next week.

While multi-manager funds tend to have higher fees and can discourage fee-sensitive investors, Munro expects better returns will eventually secure new clients.

''The fees are an issue with the wrong kind of multi-manager,'' she said.

''If you've got an alpha multi-manager, then it's just the same as if you're paying a stock picker because at the end of the day they've
got skills and you know you're going to get a better net return.''

Reuters