Boutique asset managers: The path to scale

By: Lee Burchell

Markets and regulations are constantly evolving, expensive internal operating models impede scalability, and savvy investors recognize that growth cannot be achieved if internal costs are unsustainable. How can boutique firms meet these challenges and stay competitive? By working with a flexible and reliable service provider.

The challenges

Servicing a boutique asset manager requires a lot of effort, but often at a fraction of the revenues that a larger fund house brings in. Regulations (e.g. Basel III) have made banks more conscious of their costs and margins, so they are prioritising work with larger tier-one/tier-two asset management firms instead of boutiques.

Reporting requirements are constantly changing; even harmonized blocks have inconsistent regulatory reporting rules across countries. Internally aggregating the necessary data is a big undertaking. Boutique asset managers often lack the resources to meet the regulators’ demands.

Today’s investors demand transparency; performance and risk analytics must be tailored for each client and this can be a huge workload. Equally, boutiques may struggle with performance and risk analytics when they move into complex asset classes, and demonstrating a robusty risk management system is essential if boutiques are to win large institutional mandates.

The path to scale

SS&C GlobeOp recently released a paper “Boutique asset managers: The path to scale” which explores these challenges, and how boutique asset managers can implement appropriate operational processes to give them the scalability they need.

SS&C GlobeOp provides boutique firms with the industry’s most robust and agile front-, middle-, and back-office services so they can efficiently deliver alpha and create a sustainable business. To learn how we can help you, contact solution@sscinc.com.