Chuck Fawcett, V.P. of alliances at Federated Investors, which has acquired three small fund groups over the past 18 months including the three Rightime Funds with a collective $400 million in assets, hasn't seen an overwhelming number of fund management companies abandoning the mutual fund business.

But those he has seen exiting generally fall into two camps--smaller groups that have great products but are struggling with distribution, or those that are double cursed with product manufacturing and distribution difficulties, he said.

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