Author: IIMI Admin

ABSTRACT

In  this paper we explore a segment of the asset management industry that has received relatively little attention, that is populated by independent boutique, or specialist asset managers. We conduct a survey of these managers to try and determine: the structure of this industry; information about the competitive advantage that boutiques believe that they have over larger fund houses; and information about the impediments that they face.

Key findings:

1. Boutiques see the following factors as being particularly key to their competitive advantage:

a. their independence;

b. their focus on a small number of strategies;

c. alignment of their interests with those of their clients;

d. their agility / adaptability

2. Boutiques have particular concerns about: distribution; the ability to achieve a critical mass for larger allocations; and promotion by consultants all featured prominently.

3. More mature boutiques see succession as a significant issue for their businesses.

4. Respondents argued that performance-related fees helped them align their success with that of their clients, but that investment platforms were often not willing to accommodate such fee structures.