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Are the golden handcuffs turning platinum?

Four months into 2007 and it appears investment houses are starting to wise up to the gameplans of a number of boutiques that are looking to spread their wings in the market.

Indeed, with Easter having come and gone, most boutiques will be happy to admit it is talent rather than eggs that they’ve been on the hunt for. The trouble is those managers who want to move over to the boutique culture are at a premium, as a large number of managers have already moved across.

Some of the major fund groups have now realised there are a plethora of options for fund managers and that they need to wise up and do there utmost to lock in their best talent.

Some managers are fans of the boutique culture but there are other reasons to take the plunge, such as a better contract or perhaps in certain cases an equity stake in the business.

Boutiques are nothing knew to the industry, but the knock-on effect of their increased presence is that managers now have a bigger bargaining chip when it comes to renegotiating contracts with their own employers.

Fidelity head of multi-manager Simon Ellis says high profile defections by the likes of Potter and Burdett to Thames River are bound to become less frequent as the pool of willing managers shrinks.

So if the established houses are now offering bigger, brighter and better handcuffs to keep fund managers at their respective firms, does that mean boutiques will once again have to up the anti to usher managers away?

Resolution head of sales and marketing Jonathan Polin disagrees, claiming there will always be disgruntled fund managers who want to move and boutiques will always be a valid, attractive option for them.

He says: “It is not always about who has the deepest pockets. Fund managers move for a myriad of reasons, be it the corporate environment or in some firms’ cases asset management is a small part of the business, diminishing the role of the manager no matter how good a job they do.”

Both have a fairly strong argument, but you do get the impression the market is going to struggle to maintain the number of boutiques that are currently in the market.

Maybe the future for boutiques lies in the birth of companies like Four Capital Partners, where fund managers – in this case the former Schroder trio of Chris Rodgers, Ted Williams and Tom Carroll – join together to form their own boutiques, rather than a business having just one manager and launching an on-going campaign to acquire new talent.

As for the bigger firms, much like professional footballers, their deep pockets are always going to keep current and new talent interested, in spite of new threats coming over the horizon, thus ensuring the ball is very much in the boutiques court.


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