“Another issue when raising assets is that if a boutique only has £50m to £100m, a lot of the big firms are not interested. They will have a minimum investment amount of, say, £25m, and regardless of how good the performance is they cannot invest more than 50% of the boutique firm’s assets.”
Conversely, Andrew Steel, CEO at James Hambro & Partners, is relatively sanguine on how the boutique management space will fare going forward, even in a bear market scenario.
“There would be some client nervousness around boutiques that are running £2m to £3m,” he said.
“But on the other hand, boutiques are able to be quite nimble. It is down to the individual firms and their size – those with higher assets will be quite lean cost-wise and therefore able to sustain themselves through a market downturn.”
It appears the current environment is accommodating and perhaps even encouraging the boutique management space right now, but if the cycle does begin to backpedal, there is no clear indication as to how they will hold up compared to their more established counterparts.
