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NEWSLETTER | 26 Mar 2021

Market volatility sparks greater interest in boutique asset managers

As the coronavirus vaccine roll-outs continue at speed and the pandemic begins to recede, there are new threats emerging to destabilise world order. Trade tensions are flaring between the West and China over the country’s treatment of the Uighur population and Hong Kong’s democracy. Meanwhile, Europe is facing a "vaccine war" as the European Commission threatens to ban exports of vaccines to the UK.

The asset management industry is not immune to the uncertainty. Outlooks are turning more pessimistic as research shows that institutional investment consultants’ 10-year return assumptions have fallen year-over-year for nearly all strategies, with commodities and fixed income strategies worst-hit.

Inflation prospects are also muddying the waters for managers and asset owners. Yields on US Treasuries surged above 1.7 per cent earlier this week on a sharp upgrade to US economic growth forecasts. The Federal Reserve’s stated intention to keep interest rates low for the next few years while buying bonds has led some fund managers to accuse the central bank of "deferring not deciding" the big questions.

Now might be a time to turn attention towards boutique asset managers, which often perform best in times when financial markets are volatile, outperforming larger managers and passive indexes. Asset management remains dominated by the "trillion dollar club" of mega asset managers, with an average of 87 per cent of all monthly investment flows going towards just 20 funds, according to EPFR. Ireland-based funds platform Mediolanum International Funds has earmarked EUR10 billion to invest with boutique asset managers over the next five years, with mandates already announced covering diverse strategies from technology to emerging markets equities.

Mediolanum says a razor-sharp focus on strategy, stronger incentives to outperform, and the ability to negotiate better deals are all reasons to back boutiques.

Madeleine Taylor
Editor, Institutional Asset Manager
maddy.taylor@globalfundmedia.com

Fri | 26 Mar 2021, 12:16

The European Fund and Asset Management Association (EFAMA) has published its latest monthly Investment Fund Industry Fact Sheet, which provides net sales data of UCITS and AIFs for January 2021.

Fri | 26 Mar 2021, 12:16

The upward trajectory of Jersey’s funds industry continued in 2020 with the value of regulated funds business serviced in the jurisdiction growing by 9 per cent over the year to reach a new record level, according to the latest quarterly statistics.

Fri | 26 Mar 2021, 12:16

Despite its new obligations for financial intermediaries taking effect in September 2020, the European Commission's updated Shareholder Rights Directive (SRD II) is still very much in the early stages of a full and seamless adoption across European regulated markets, according to a new report by global fintech Broadridge Financial Solutions.

Fri | 26 Mar 2021, 12:16

FX HedgePool, a matching engine for mid-market execution of FX swaps, has completed its first match aligned with International Monetary Market (IMM) dates.

Enhanced algorithmic trading solution launched by Cowen

Fri | 26 Mar 2021, 12:16

Cowen has launched a new algorithmic trading solution, the "Inaccessible Liquidity Adjustment," to address fundamental shifts in the US market structure and help clients accurately navigate an ever-evolving investment landscape.

Fri | 26 Mar 2021, 12:16

Digital 9 Infrastructure has raised gross proceeds of GBP300 million in its Initial Public Offering (IPO) on the Specialist Fund Segment of the Main Market of the London Stock Exchange, through the issue of, in aggregate, 300 million Ordinary shares at an issue price of GBP1.00 per Ordinary Share.

Fri | 26 Mar 2021, 12:16

FinecoBank has made funds from global investment manager, Ninety One, available on its investing platform. Fineco’s growing customer base in the United Kingdom can now access a selection of Ninety One’s distinctive active investment strategies including the sustainability focused Global Environment Fund which invests in companies that are driving decarbonisation.

Fri | 26 Mar 2021, 12:16

Confluence Technologies, Inc (Confluence), a global technology solutions provider helping the investment management industry solve complex investment data challenges, has secured a long-term contract with a leading global fund administrator that will use Confluence’s Risk API solution to deliver fully-fledged risk analytics.

Fri | 26 Mar 2021, 12:16

SKALE Network, an open-source modular protocol for building application-specific blockchains, has been added to ConsenSys Codefi's suite of tools for enterprise developers.

Umbria Network DeFi Farm launches

Fri | 26 Mar 2021, 12:16

Umbria, a DeFi protocol that uses layer two technology developed by Polygon, has launched Umbria Farm.

Fri | 26 Mar 2021, 12:16

JonesTrading Institutional Services (JonesTrading) has appointed industry veterans Chris Macaluso and Jon Everett to its European and US outsourced trading teams, respectively.

Fri | 26 Mar 2021, 12:16

North Sky Capital (North Sky), a specialist in impact investing, has appointed Dale Freudenberger has as an Operating Partner.

SASC appoints new Investment Director

Fri | 26 Mar 2021, 12:16

Social and Sustainable Capital (SASC) has expanded its investment team with the appointment of Jorge Llorens as Investment Director, at a time when the firm continues to grow and increase its investments in charities and social enterprises.