Boutique managers eye international and alts expansion
Boutique asset managers are eyeing international expansion, with the majority seeing an opportunity in particular to launch alternative investment strategies, according to a new survey.
Universal Investment Group surveyed asset managers with not more than €20bn (£16.8bn) in assets under management between May and June. 55 per cent of respondents said that they plan to expand internationally within the next two years by entering new markets and expanding product offerings.
Conducted in collaboration with UI efa and Alumia, the survey also found that around 71 per cent of managers plan to launch private equity, debt or infrastructure strategies outside of their home markets over the next two years.
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German and French-speaking countries in Europe are two targets, with 24 and 18 per cent of boutiques respectively eyeing them for growth.
“European assets under management reached €29tn in 2023, highlighting the region’s highly attractive growth potential, with 70 per cent of managed assets coming from asset owners,” said Marcus Kuntz, head of sales and fund distribution at Universal Investment. “Luxembourg and Ireland, now the largest global fund domiciles outside of the US, provide excellent access to the vast pool of institutional capital in Europe. We continue to see strong growth in both locations.”
Despite the appetite for expansion there are significant hurdles, such as limited familiarity with the different markets, particularly when it comes to local regulations.
Of the boutiques that are already operating internationally, 40 per cent said they struggle with attracting potential investors and just 10 per cent have a robust network in jurisdictions outside of their home market.
“Interestingly, managers tend to underestimate the costs of establishing their own operations in new markets and overestimate the expenses of partnering with a third-party provider,” Kuntz added.
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