Your next chapter - Expansion plans and exit strategies for boutique asset managers

May 2022

Across the asset & wealth management (AWM) industry, major trends are relentlessly reshaping every area of a firm’s activities - from front office, middle office to back office functions. Forces such as increased focus on Environmental, Social, and Governance (ESG) considerations, continued operating model pressures, increasing regulatory scrutiny, shifting workforce trends and greater data and analytics imperative, are so significant that asset managers have no choice but to continuously re-engineer their strategies. Against this backdrop, there is urgency for boutique asset managers operating in alternative investment strategies such as private equity, hedge funds, real estate, private credit, and infrastructure, to think differently about how to reassess their strategic playbook.

In Asia-Pacific, many boutique managers are already well established with strong reputations, serving sophisticated investors around the world. They are valued by investors given their differentiated source of returns and counterpoint to large multinational asset managers. With this, their agile and niche focus, often specializing in private multi-asset class solutions is frequently seen as a valuable differentiator and source for delivering alpha.

To prepare for the next stage of growth and unlock value, boutiques must take bold steps in transforming their firm to meet today’s challenges, be it expanding further through inorganic M&A opportunities, organic growth or capital-raising via an IPO. Boutique asset managers need to act now as the industry moves to a new paradigm. Boutiques that do not align their strategies with the ever-evolving environment may face disruption, risk irrelevance or, even if successful in growing, may become too complex to be managed effectively.