Boutiques are crossing borders
13 July 2015 New York
Image: Shutterstock
Boutique asset managers are moving their focus away from their home countries in search of more investment growth, with a particular increase in interest in Europe, according to a survey by TABB Group for SunGard.
When asked about investment, 48 percent of respondents said that EU equities have seen either significant demand or the greatest demand so far in 2015. Of US managers, 57 percent said they are seeing demand for European Union (EU) equities, compared to 21 percent in 2013.
Of 110 managers questioned, 70 percent are domiciled in the UK, but 90 percent are active in European markets. The increased interest in Europe was attributed to a wider search for yield, and there is also evident demand for Asian equities, with 30 percent of respondents saying they have seen this.
Almost half of respondents, 48 percent, also said they have seen a significant demand for exchange-traded funds, with many using these as a low-cost means of investment, and a way to improve performance through stock-picking and direct investment.
Regulation emerged as the most pressing issue among boutique asset managers, with 68 percent naming this as their top concern, compared to 17 percent in 2013. This was attributed to growing complexity for boutiques in operating across multiple jurisdictions, regardless of where they are domiciled.
More than 75 percent said they think MiFID II could have an impact on their payment-for-research business in the next 12 to 18 months, and some suggested this may cause them to withdraw from some asset classes, particularly small and medium-sized enterprises.
Other concerns raised included raising assets, finding new alpha opportunities, and attracting money. Some respondents also noted the importance of investing in technology, internal processes and training in making boutique asset managers more attractive to investors.
Trevor Headley, head of product management of SunGard’s boutique asset management business, said: “We are seeing confident and positive boutique asset managers who are using their greater focus and agility, as well as more flexible systems, to carve out profitable niches despite tougher regulation.”
“What is interesting is their investment focus, with European equities at the forefront and ETFs increasingly used as an efficient base for focused portfolio construction.”
Rebecca Healey, consulting analyst of TABB Group in London, suggested that regulations could actually prove beneficial for smaller asset managers, saying: “While institutional asset managers once had the advantage of scale and breadth, recent liquidity constraints, and the growing raft of regulatory complexity and technology demands no longer guarantee progress over smaller managers. Boutiques may yet prove to have the shortest flight path out of regulation into the new era of asset management.”
When asked about investment, 48 percent of respondents said that EU equities have seen either significant demand or the greatest demand so far in 2015. Of US managers, 57 percent said they are seeing demand for European Union (EU) equities, compared to 21 percent in 2013.
Of 110 managers questioned, 70 percent are domiciled in the UK, but 90 percent are active in European markets. The increased interest in Europe was attributed to a wider search for yield, and there is also evident demand for Asian equities, with 30 percent of respondents saying they have seen this.
Almost half of respondents, 48 percent, also said they have seen a significant demand for exchange-traded funds, with many using these as a low-cost means of investment, and a way to improve performance through stock-picking and direct investment.
Regulation emerged as the most pressing issue among boutique asset managers, with 68 percent naming this as their top concern, compared to 17 percent in 2013. This was attributed to growing complexity for boutiques in operating across multiple jurisdictions, regardless of where they are domiciled.
More than 75 percent said they think MiFID II could have an impact on their payment-for-research business in the next 12 to 18 months, and some suggested this may cause them to withdraw from some asset classes, particularly small and medium-sized enterprises.
Other concerns raised included raising assets, finding new alpha opportunities, and attracting money. Some respondents also noted the importance of investing in technology, internal processes and training in making boutique asset managers more attractive to investors.
Trevor Headley, head of product management of SunGard’s boutique asset management business, said: “We are seeing confident and positive boutique asset managers who are using their greater focus and agility, as well as more flexible systems, to carve out profitable niches despite tougher regulation.”
“What is interesting is their investment focus, with European equities at the forefront and ETFs increasingly used as an efficient base for focused portfolio construction.”
Rebecca Healey, consulting analyst of TABB Group in London, suggested that regulations could actually prove beneficial for smaller asset managers, saying: “While institutional asset managers once had the advantage of scale and breadth, recent liquidity constraints, and the growing raft of regulatory complexity and technology demands no longer guarantee progress over smaller managers. Boutiques may yet prove to have the shortest flight path out of regulation into the new era of asset management.”
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