10 December 2016


Retired Member

2,018Posts 6,640,988Views 2,336Comments

Operational Lessons for New Boutique Asset Managers

27 May 2014  |  982 views  |  0

From the largest institutions to the smallest boutiques, today’s asset managers all face similar, well-documented challenges: regulatory requirements, pressure on fees, shrinking margins and more cautious investors. But for the start-up boutique, one overarching challenge in particular can create a major barrier to entry – the “institutionalization” of the industry.

With a growing list of operational, due diligence and compliance requirements that boutique asset managers must meet to inspire investor confidence and raise assets, it is becoming increasingly expensive and difficult to launch an asset management business. At the same time, however, the need to achieve institutional credibility is driving firms to focus as never before on improving their operational infrastructure. This in turn is helping them not only to increase efficiency and reduce costs, but also to seize the major opportunities that the market currently offers boutiques.

For, in an uncertain investment climate, where room for undifferentiated, mid-sized firms is shrinking, many entrepreneurial, specialized boutiques have actually held their ground against the odds and prospered in their niche. Along the way, they’ve learned some valuable lessons that point the way for new boutiques to emerge and flourish.

In a recent study of more than 200 boutique asset managers in 38 countries, Tabb Group asked established firms what they’d do differently if they were starting up today. With the benefit of hindsight, the majority recommended getting operations in order before anything else. By prioritizing infrastructure sooner, some felt they would have been better equipped to navigate regulatory requirements. Others wished they’d “thought big” from the start in terms of operational scale or had prepared better for growth.

The good news is that, as well as the wisdom of their predecessors, today’s start-ups can benefit from a new generation of more affordable technology and cost-effective outsourcing arrangements. Several years ago, these automated, scalable, front-to-back-office solutions and managed services were simply not affordable for new boutiques. But the world of asset management has changed, and technology continues to adapt to its needs. So now, in fact, boutiques can start up as they mean to go on – with institutional standards of infrastructure that satisfy regulators and investors alike.



TagsRisk & regulation

Comments: (0)

Comment on this story (membership required)

Latest posts from Retired

An industry matured: highlights from Mobey Day 2016

18 October 2016  |  958 views  |  0 comments | recomends Recommends 0 TagsRetail bankingInnovation

Reorganising for the Age of Collaboration

27 September 2016  |  2546 views  |  0 comments | recomends Recommends 0

Fintech innovation in the B2B space has only just begun

12 September 2016  |  13678 views  |  1 comments | recomends Recommends 0 TagsPaymentsInnovation

Protecting Data with DLP

23 August 2016  |  5360 views  |  0 comments | recomends Recommends 0 TagsSecurityBrexit

How to end what ails online commerce

22 August 2016  |  4791 views  |  1 comments | recomends Recommends 0 TagsPaymentsTransaction banking

Retired's profile

job title
member since 2014
Summary profile See full profile »

Retired's expertise

What Retired reads
Retired writes about

Who's commenting on Retired's posts

Alex Aleksandrovski
Ketharaman Swaminathan
João Bohner
Steven Hatton
Graham Seel
Nikhil Thadani
Gerard Hergenroeder
Konstantin Rabin
Dharmesh Mistry
Matt Schofield
Anna Robert
Ian Davis