In the animal world larger predators often have a natural advantage when it comes to hunting prey. Likewise, it may be assumed that in the asset management world larger firms with greater resources and deeper pockets have an advantage over smaller rivals in the increasingly elusive hunt for alpha.
But big is not necessarily beautiful in the asset management ecosystem. In the eyes of investors, the real alpha predators are the smaller boutiques.
Investors taking part in our recent research study think larger asset managers are less able than smaller, boutique firms to deliver alpha. In fact, our global study of institutional investors found an overwhelming majority (90%) think larger firms are at a disadvantage when it comes to delivering higher returns . . .