Multi-manager funds are often custom tailored products offered by an asset manager, mostly by the asset or wealth management division of a large investment bank or private bank.
They differ from Funds-of-funds in that they do not raise capital from multiple investors as they are custom tailored.
On the other hand, Multi-manager funds are offered with much less capital need to invest.
Spreading the investment money across different asset classes or markets allows the investor to achieve the necessary diversification, reducing risk without sacrificing the return.
However, as the main marketers and providers are large investment banks or private banks, sales staff or private client advisors may are subject to conflicts of interest as they are selling an investment product consisting of funds from their employer where bonuses are paid on the basis of underlying fund fee revenue and invested capital into the Multi-manager fund.