The rise and rise of boutique funds by dfhercbml


More Info

       The rise and rise of boutique funds
                                                                                             properly and are likely to identify a         portfolio rather than just concen-
       With fund of funds managers                                                           broader range of solutions to                 trating on performance or a man-
                                                                                             achieve a portfolio’s objectives.”            ager’s reputation when choosing
       increasingly looking to boutiques, such                                                  Tilney’s assets under manage-              investments.
                                                                                             ment, excluding private client port-             While the choice of UK mutual
       companies have gone from strength                                                     folios, amounted to £917m at the              funds is vast, Magnus Spence,
                                                                                             end of June 2004 and rose by                  founder of Dalton Strategic Part-
       to strength over the past two years                                                   £643m to the end of June this year,           nership, feels investors could be
                                                                                             bringing      its    total     assets         swayed towards boutique-run vehi-
                                                                                             to £1.56bn.                                   cles because their managers make
       BY NATALIE KENWAY                          The rise of supermarkets over                 In addition to the widening pool           significant investments in their
                                               the past five years, which has been            of multi-managers, Beestin also               own products. This, he said, shows
       The recent rise of boutique-style       driven by the fact it simplifies client        noted that the average investor has           they have conviction in their own
       fund management can partly be           portfolio construction, means the             become more sophisticated in terms            products but also have a vested
       attributed to interest from fund of     bulk of fund sales are now made               of investment knowledge and                   interest to perform.
       funds managers, with many firms          via platforms. The choice available,          therefore has been drawn to the                  “Boutiques tend to be owner-
       doubling their funds under man-         thanks to legislative changes that            alternative options boutiques may             managed and the fund managers
       agement in the past two years.          make Sipps more widely accessible,            offer.                                        either stand or fall by the fund’s
          In a survey carried out by Invest-   has also significantly improved                   He added: “Our group is com-               performance as opposed to the sit-
       ment Week, New Star, Artemis,           sales.                                        prised of three key components                uation in big firms where managers
       Midas Capital and Dalton Strategic         That said, Holloway also pointed           including commercial property                 are employed on an annual salary
       Partnership said their assets had       out that the specialist nature of             funds, the Opal division, which               regardless of performance,” he
       doubled since June 2004 while data      many                        boutique          consists of funds of hedge funds,             said.
       from Odey, SVM, Rensburg, Nep-          funds means they are often looked             and our mutual fund boutiques. We                Dalton has quadrupled its assets
       tune and Rathbones showed that          at by fund of funds managers and              have seen the biggest increase in             under management over the past
       their assets under management           that too has helped increase                  alternative assets, commercial                two years from £419m at the end
       today are slightly less than double     inflows.                                       property funds and the Opal divi-             of June 2004 to £2.27bn at the same
       what they were two years ago.              Ian Beestin, marketing director            sion over the past two years. Inves-          point this year.
          While the strong bull run over       and CEO of mutual funds at Tilney             tors can now access interesting and              However, while the firms spoken
       that time period has clearly added      Investment Management, said:                  obscure products that were not                to by Investment Week have seen
       to asset growth, some firms said         “The proliferation of funds of                widely available before.”                     their assets grow significantly over
       platform inclusion and multi-man-       funds and multi-managers has cer-                Another point picked up in the             the past two years, some disputed
       ager interest has also been a key       tainly helped. These professional             survey is that intermediaries are             whether they were a boutique at
       driver.                                 fund managers have got the time               now looking to pick funds that per-           all, pointing out that the word
          Rathbones said that, while its       and the resources to look at funds            form a specific purpose within a               means different things to different
       predominantly UK focus is an asset                                                                                                  people.
       when marketing its products,             BOUTIQUES’ ASSETS UNDER MANAGEMENT                                                            Holloway said: “We do not like
       recent contracts signed with life                                            End of June 2004           End of June 2006            being regarded as a boutique and
       assurance platforms such as                                                                                                         would describe ourselves as a
                                                New Star*                           £8.2bn                     £18.1bn
       Standard Life and Winterthur Life                                                                                                   medium-sized asset management
       have really driven its sales over the    Midas Capital                       £247.9m                    £602.6m                     company that specialises in equity
       past few years.                          Tilney Investments**                £917m                      £1.56bn                     income.”
          David Holloway, unit trust mar-                                                                                                     Spence said Dalton also dislikes
       keting director at the firm, said:        Dalton Strategic Partnership        £419m                      £2.27bn                     the boutique tag, adding that he
       “After a lot of hard work on our         Odey Asset Management               £1201.94bn                 £2250.62bn                  operates a worldwide business and
       funds       they     have       been     SVM                                 £279.3m                    £403.5m                     the word boutique can imply just a
       getting on to platforms and fund                                                                                                    small operation.
       supermarkets and we have a lot           Rensburg***                         £521m                      £1.26bn                        He added: “We hate being called
       more money coming in via                 Neptune                             £346m                      £656m                       a boutique. We are a new global
       that channel.”                                                                                                                      investment management company
                                                Artemis                             £3,7bn                     £10bn
          At the end of June 2004 Rath-                                                                                                    and all of our thinking is con-
       bones had £642m in assets under          Rathbones                           £642m                      £1.42bn                     ducted in a global way. We com-
       management and that figure had            * New Star figures at end of April for both years not June.                                 pare companies in the UK to their
       increased to £1.42bn at the end of       ** Figures for Tilney include investment products not including private client products.   equivalent abroad, not to another
       June 2006, a rise of £778m.              *** Rensburg 2004 figures for 30 November not June 2004.                                    in the UK.”

                                                                  For further information, please contact:

                                                           Magnus Spence •
                                                            Richard Jones •

                                                                        Dalton Strategic Partnership
                                                                            3rd, 7 Princes Street
                                                                                 EC2R 8AQ

To top