25 April 2017

Hedgeweek: FIS and AITE Group release new study of boutique asset management landscape

Research by FIS shows boutique asset managers can gain an edge despite the challenges of maintaining active strategies. In an industry increasingly dominated by the success of passive products, boutique asset managers hold a generally positive outlook for the future of active investment management.

The new report, “The Active Edge: Boutique Asset Management” presents the results of an in-depth qualitative study of boutique investment strategies in the context of the asset management universe and global financial ecosystem.

Based on 31 interviews with executives and senior managers from boutique asset management firms in the last quarter of 2016, “The Active Edge: Boutique Asset Management” delves into major challenges facing boutiques, as well as growth drivers and expectations for the future of the sector. Covered in the study are boutique asset managers’ perspectives on:

• The pervasiveness of passive
• The complications of compliance 
• The struggle for survival 
• The drive for differentiation
• The flourishing of fund flows
• The task of technology

“Boutique asset managers employing active strategies face pressures from all angles: pressure to outperform passive funds, pressure to justify necessarily higher fees, pressure to comply with a growing number of regulations, and pressure to best competitors by offering smarter performance and an enhanced client experience,” says Wayne Riches, director of Strategy and Solutions Management, FIS. “The fact that boutiques are meeting these challenges and still delivering positive returns helps to reinforce the appeal of the boutique asset manager.”

“Investors will likely be skating over some rough ice ahead. Managers able to maintain their edge while keeping costs down will be able to hold ground,” says Spender Mindlin, analyst, Aite Group. “Technology enables communication with clients, and offers transparency and near-real-time information on investments. This study illuminates a sense of optimism that active strategies may, in fact, give boutiques an edge.”

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