When worlds collide: Boutiques to benefit from 'crunch point' as mega-mergers ramp up

Firms hungry for bigger tie-ups

David Brenchley
clock • 5 min read

Smaller boutique fund management groups are set to benefit from a forthcoming "crunch point" for serial underperforming rivals as the large groups get ever-larger through M&A activity, leading to more top-quality teams defecting to firms where they "are more connected to the profits they are generating".

Jefferies analyst Tom Mills believes 2020 will be "something of a crunch point" for an industry that has consistently failed to deliver outperformance versus benchmarks and passive products. Morgan Stanley to acquire Eaton Vance in $1.2trn tie-up This has led to pressure on organic growth and fee margins, meaning appetite for mega-mergers continues to increase. The current year began with Franklin Templeton's $5.2bn acquisition of Legg Mason in February. That deal was eclipsed more recently by Morgan Stanley's $7.5bn purchase of Eaton Vance. A further blockbuster tie-up between ...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Funds

Marlborough expands multi-asset fund range and lowers charges

Marlborough expands multi-asset fund range and lowers charges

Rise in adviser demand

Jenna Brown
clock 31 March 2025 • 2 min read
Rathbones adopts 'Sustainability Focus' label on two funds

Rathbones adopts 'Sustainability Focus' label on two funds

Effective from 2 April

Sorin Dojan
clock 31 March 2025 • 1 min read
Seven Aberdeen Enhanced Index funds awarded RSMR rating

Seven Aberdeen Enhanced Index funds awarded RSMR rating

Due to a ‘well-resourced team’

Sorin Dojan
clock 31 March 2025 • 1 min read
Trustpilot