27four Investment Managers
6th May 2015
It’s tough out there for boutique fund managers
Cape Town – The end of a bull market is always the time when new boutique fund managers appear on the scene because that is when the opportunity to make money seems greatest.
However as soon as the market turns, or moves sideways, that’s when the boutiques struggle, in particular those that do not have the critical mass of funds to cope with big fund withdrawals.
Yet despite this cycle of boom and bust, the number of boutiques continues to grow in South Africa, and around the world. The trend is being driven by the desire to be independent, to offer specialised expertise and products, to align owner and client interests and to be free of the bureaucratic shackles of big institutional fund managers.
And so the number of boutique managers in South Africa has risen from 8% of the investment managers’ universe in 1999, to about 38% of the universe currently, according to industry body Asisa.