There is a lot of talk about how much value boutique asset managers can add. When you are smaller you are more nimble, agile, can take more meaningful positions in smaller companies. This is true. (as is the case of the larger asset manager taking a meaningful position in a large company)
True too is the argument that there are many smaller asset managers that offer tremendous value. And they should be supported and valued for what they offer. But they are not the only option and they are not the only fund managers that can add value.
As in all things in life there are many sides to the argument – and as this is not possible in the world of fact only (finances deal in the future), in this case there will be your side, my side, the truth and the future – and the side of every client. Both the larger and smaller asset managers can add value, both have their advantages and disadvantages, and both –all asset managers – have the ability to meet certain investors’ needs.
Many of the smaller asset managers have done brilliant work – and they have added a new dimension to the industry. Fund management in SA is alive and well – there is competition (there could be more) – and there are in many cases challenges to the established way of doing things. This is an industry that by way of the many players involved has the ability to evolve.
Some investors may feel more comfortable with a smaller asset manager, some with a larger asset manager. In each case – who you choose to look after your current and future wealth must be suited to you.
I have no doubt that over the year we will see more of the active versus passive and small versus big debates. These are interesting, valuable to the industry – but when it comes to adding value to the client we need to set the client’s needs first and then see how those could be met. It may be smaller asset manager – it may be a large manager. Whichever it is – as long as their focus is your needs size should not be the only argument.