Investment firms specializing in niche markets are resorting to outsourcing services due to increasing regulatory requirements

Headline: Boutique Asset Managers Pursue Growth and Streamline Operations Through Outsourcing

In a recent survey by Universal Investment Group, it has been revealed that a significant number of boutique asset managers are looking to expand beyond their home markets and pursue future growth. Almost half (49%) of respondents are aiming to expand, with more than half (52%) planning to outsource at least one business function within the next 12-24 months.

The survey, titled the 2025 Boutique Asset Management Survey, highlights the intensified challenges that asset managers have faced over the past 12 months. Marcus Kuntz, group head of sales and fund distribution at Universal Investment, commented on this, stating that the challenges have indeed grown more intense.

Increasing competition and margin pressure, as well as regulatory requirements, were identified as the main challenges by 41% and 71% of respondents respectively. However, the survey also indicates that boutique managers are not deterred by these challenges. Instead, they are adopting a strategy of streamlining operations and focusing on their core competencies to deliver investment performance for clients.

Outsourcing non-core functions is a key part of this strategy. By outsourcing these functions, boutique managers can focus on their core competencies, delivering investment performance, and reducing their cost base. This strategy has been successfully implemented by several organisations, including Pendal, which has expanded internationally with a multi-regional, multi-boutique asset management model operating across various regions within the last 12-24 months.

Other organisations, such as LaSalle Investment Management and Natixis Corporate & Investment Banking, are also indicating international expansion and increased capital deployment in various markets, including real estate credit markets globally, and strategic investments in boutique asset management through acquisitions respectively.

This strategy of streamlining operations and focusing on core competencies is being adopted by many organisations, not just in the asset management sector. By outsourcing non-core functions, these organisations can reduce their cost base, free up resources, and focus on what they do best, ultimately delivering better results for their clients.

Investment firms specializing in niche markets are resorting to outsourcing services due to increasing regulatory requirements