As a second academic study confirms the existence of a ‘Boutique Premium’, members of the Group of Boutique Asset Managers (GBAM) are urging investment consultants, fund platforms, and advisers to re-evaluate their approach to boutique funds.
The existence of such premia were first identified in an academic study sponsored by GBAM and published in 2022; titled: Is there a Boutique Asset Management Premium? and conducted by Andrew Clare, Professor of Asset Management at Bayes Business School, provided the first quantitative analysis of boutique performance across global fund sectors.
The latest academic paper – titled: The Case for Boutiques – was also authored by Professor Clare in partnership with the Independent Investment Management Initiative (IIMI). The research, based on a survey of 87 mainly UK and European boutique asset managers, identified four key attributes that give boutiques a competitive edge: independence, focus, alignment with clients, and agility in decision making.
GBAM said it welcomes the IIMI study which reinforces the findings of its own, earlier research into more than 780 funds across 120 large and boutique fund groups, and which revealed consistent outperformance in four key sectors, including European Mid/Small Cap and Global Emerging Markets.
GBAM urges that when the two studies are taken together – firstly quantitative followed by the second qualitative - the advantage of investing with a boutique becomes impossible to ignore.
Tim Warrington, Chairman of GBAM - also Chairman of Skagen Funds and Director of Wealth Management, Storebrand Asset Management - said: "This is now the second academic, peer-reviewed study in recent years confirming what many investors already know: boutiques can deliver a premium over their larger counterparts. But despite the growing body of evidence, boutiques often remain underrepresented on platforms and are too often overlooked by consultants."
"In a world of shrinking alpha and increased industry consolidation, we’re urging gatekeepers to rethink how they value specialist, performance-led managers.
"This isn’t just a UK story. The boutique premium exists in global markets too, and clients globally are recognising the benefits of backing focused, specialist managers. Our challenge now is to make sure the ecosystem – from consultants to platforms – keeps pace with the evidence."
