Maya's Ethical Dilemma in Asset Management

Medium Asset Manager Code Loyalty To Clients

As part of a specialized investment management firm, Maya is responsible for managing a significant portfolio for her long-term client, XYZ Corp. Recently, Maya was approached by another entity to invest a portion of her client's assets in a private equity fund. This fund promises higher returns but has certain illiquidity risks that may conflict with XYZ Corp's liquidity needs. Maya considers presenting this opportunity to XYZ Corp; however, she is also aware that investing in the fund might benefit her firm through higher fees.

Under the Asset Manager Code, especially focusing on the principle of Loyalty to Clients, what should Maya do in this situation to ensure she adheres to ethical standards?

Maya should not present the investment opportunity to XYZ Corp and decline investment in the private equity fund.

Maya can present the opportunity to XYZ Corp but should disclose the potential conflicts of interest and let the client make the final decision.

Maya should invest a portion of XYZ Corp’s assets in the private equity fund without informing the client, believing it will ultimately be in their best interest.

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