Investors often ask whether they are better off owning one of the listed funds managers, or investing in the funds that the company manages.
It’s an interesting question, because you’re on different sides of the business. If you invest in the unlisted funds – or even the listed investment companies (LICs), listed managed funds or exchange-traded funds (ETFs) that some of the managers have – you’re a beneficiary of the fund manager’s skills. If you invest in the listed operating company – the “headstock” – as a part-owner of that business, you provide those skills to the fund investors.
The simplest distinction is that investors in the unlisted funds pay management fees – and sometimes, performance fees – and investors in the listed business benefit from these fees.