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The multi-manager sector is moving towards two distinct types, according to Santander Asset Management's head of multi-manager.

Keith Speck added that these groups either fall into aggressive or medium-term managers.

It added the asset manager may launch new funds later in the year to meet the demands of the growing popularity of the sector. The asset manager added that multi-manager sales have increased and investors and IFAs are seeing the benefits of the sector.

Mr Speck said: "There has been an appetite for absolute return vehicles, especially in the volatile markets we have recently seen. There will be two distinct types of multi-manger: the more aggressive returns of funds of funds and the core type of managers that are looking towards the medium term. We will probably launch funds but we are currently discussing it. Multi-manager is very popular at the moment. There have been lots of small funds of funds that have been launched, but Santander has a large global presence."

He said that Santander is moving some of its funds from a manager of managers' to a hybrid approach. The asset manager has bond, equity and Oeic multi-manager funds as well as its range of Premium funds. One of the changes Mr Speck has implemented, since he arrived at Santander from Axa Framlington in January, is to reduce the number of funds in its UK Equities Fund from more than 200 to about 70, and he added that more changes maybe under way.

Mr Speck added that with its funds you do not get double charging because the funds use a manager of managers' approach. He said it is worth paying slightly more to get performance and most investors do not understand how funds interact. He said: "Because of our size it gives us a huge advantage when it comes to negotiating fees. There are benefits to manager of managers and funds of funds – it is giving you an actively managed portfolio and performance. A lot of IFAs realise they cannot manage money and advise clients. If we get any new multi-manager funds the ability to invest in a wide range of Nurs and Ucits III will open up the tool box and open up the remit."

Mr Speck said it also has two fund managers based in Madrid and because of Santander’s global presence in places like Latin America it has been able to take advantage of this when selecting funds.