Discounts on alternative investment trusts, which hurt multi-managers last year, have proved a bargain now that liquidity has returned to the markets, according to Andrew Yeadon, head of multi-manager at Schroders.

As manager of the Schroder Multi-Manager Cautious Managed fund, he blamed 60 per cent of the portfolio’s underperformance in 2008 on investment trust holdings becoming illiquid and trading at massive discounts to their net asset value.