Structural Changes in the European Asset Management Industry: The Rise of the Multi-Boutique Model

by Anshuman Jaswal, PhD,  Muralidhar Dasar, November 19, 2010
Industry Trends
EMEA

Abstract

The financial crisis and the equity market downturn have added momentum to changes that are altering the structure of the asset management industry.

In a new report, Structural Changes in the European Asset Management Industry: The Rise of the Multi-Boutique Model, Celent finds that multi-boutique structures have emerged as an important operating model in the European asset management industry. Around 28% of asset managers have already adopted the model, and more are expected to do so. Multi-boutique asset managers in Europe currently have average assets under management of €150 billion, compared to large asset managers’ (integrated producers’) average AuM of €300 billion. However, the AuM of multi-boutique asset managers is expected to grow faster.

“The industry is moving towards greater consolidation. Smaller players have been hit hard by the financial crisis,” says Muralidhar Dasar, Celent Analyst and coauthor of the report. “In such a scenario, the multi-boutique model is even more relevant, as it helps create an entrepreneurial culture within investment teams and puts them in charge of making investment decisions, coupled with the backing of a large company which provides all auxiliary functions.”

“Regulation is going to be crucial for asset management and the multi-boutiques,” says Anshuman Jaswal, Celent Senior Analyst and coauthor of the report. “If it becomes tougher, multi-boutiques might suffer, and there might be further upheaval in the industry.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

5

Market Overview

6

Operating Models: The Rise of the Multi-Boutique Model

8

 

The Beginning: Boutique Investment Houses

10

 

Rise of Multi-Boutique Structures

12

 

Factors in the Rise of Multi-Boutiques

12

 

Structure of the Multi-Boutique Firms

13

 

Growth Paradigms

14

Trends in Multi-Boutiques

15

 

Size Matters: Rise in M&A Activity

17

Risk Management and Regulation

20

 

Risk Management

20

 

Impact of Regulation

20

Conclusions

25

Leveraging Celent’s Expertise

27

 

Support for Financial Institutions

27

 

Support for Vendors

27

Related Celent Research

28

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