A group of boutique asset managers met in Spain on Thursday and Friday to form a self-help group to enable them to compete more effectively internationally with more dominant global players and to foster cooperation among themselves to increase their competitiveness.
The boutiques have agreed to form an association which they have called Group of Boutique Asset Managers (GBAM).
The inaugural meeting of GBAM was led by March Gestión de Fondos, the asset management arm of the Spanish private bank Banca March, and supported by other attendees from LatAm, Europe and Asia.
Having set-up the organisation GBAM is now seeking other like-minded boutiques.
The formation of GBAM is in response to the increasing polarisation of the asset management world between big asset managers with a broad range of capabilities and small specialist boutiques with a limited range of investment strategies (the “Barbell” effect).
One aspect of the Barbell effect (often highlighted by commentators) is the ability of those managers caught in the middle ground to survive. Less well appreciated is the position of world class boutique asset managers whose voices (and successful investment strategies) are less well heard in world markets, given the dominance of powerful, well resourced, global players.
In response to this dominance, GBAM has been formed to foster cooperation among like-minded boutique/specialist asset managers. The managers who met in Spain all share a performance driven culture, are generally recognised for their talent, creativity and entrepreneurial spirit. Crucially, all have interest in expanding their businesses internationally, and so all face similar challenges in terms of managing to do so on limited resources. By coming together to share information, the group believes its members will be in a better position than they otherwise might have been.
José Luis Jimenez (pictured), chief executive of asset manager March Gestión de Fondos, says: “Asset management is an exciting business given the levels of competition amongst the firms – large and small. And all of us seek to offer the very best strategies to investors. But while the boutiques represented in GBAM are happy to compete with the very best, we have to appreciate that the investors around the world may not be in a position to access boutiques managers as easily as the big firms. On the one hand, small players cannot be available everywhere and on the other, as a consequence of the crisis, many distributors’ prefer well-known names because it is easier to pick up a strong brand recognised by investors.
"During the last year and a half I have had the opportunity to talk with many boutiques managers around the World and realised that we are facing the same opportunities and threats. It therefore became obvious that in order to take advantage of these opportunities boutique managers do not have to continuously ‘reinvent the wheel’ by each seeking the same information. Instead they can tap into a trusted network of smart people who can help them take a big jump forward in the development of their business.
“GBAM is not interested in involving itself in lobbying or competing with our national or international trade organisations. Rather, it is just a group of like-minded people who want to discuss important things in an open way and exchange ideas – our only goal being to improve our businesses on behalf of our clients and partners.
“Excellent world class boutique mangers can grow, even in a sector dominated by big players, providing they can offer greater added value that them. Performance plays a critical part, but equally being the first to discover new and interesting investment propositions or the strong alignment of interest that boutique managers have with their clients, is an attractive proposition.”
