The 2025 Boutique Asset Management Survey from Universal Investment Group, the fund services platform and Super ManCo with some €1.4trn of funds under administration, has found that more than half, 52%, plan to outsource at least one business function in the next 12-24 months, with a near similar ratio, 49%, planning to expand outside their home markets, including launching international products or through M&A.
The key driver of this change is the need to find ways to survive ongoing commercial and regulatory pressures hitting their business models, according to respondents to the survey underlying the findings, which queried managers of assets between €500m-€20bn.
The survey was sent out to Germany, Austria, Switzerland, Denmark, Finland by email, while surveys in the UK and US were done by telephone interviews.
Marcus Kuntz, group head of Sales and Fund Distribution at Universal Investment, commented: “The challenges asset managers face have intensified in the past 12 months. As commercial pressures have increased and the direction of markets has become less certain, many organisations are seeking to streamline operations through outsourcing non-core functions, while others are taking bold steps to pursue growth in new and existing markets.”
“These dual strategies give boutique managers the best of both worlds, allowing them to focus on their core competencies, reduce their cost base, and deliver investment performance for clients.”
Regulatory requirements were cited across all regions as the key challenge, named by 71% of respondents. Increased competition and margin pressure (41%) and differentiation in a crowded market (39%) were others.
The regulatory challenge was seen as most acute in Central Europe (86%) – defined as Germany, Switzerland, Austria, Denmark, and Finland – alongside growing demand for passive products (40%), and standing out in a crowded market (39%).
In contrast, asset managers in the UK and US are primarily concerned about increasing competition and shrinking margins (67%).
Outsourcing
The study found 82% of respondents globally already use third-party providers, rising to 93% in the UK and US.
That is up significantly over the past year. Then, some 64% said they would consider third-party providers for fund administration.
Over the past year, some 43% have “increased their use of third-party providers to alleviate operational complexity and control costs,” Universal Investment stated, while more than half, 52%, expect to outsource some of their services in the next 12-24 months.
Areas most likely to be outsourced include: ManCo/fund administration (68%), fund marketing and distribution (55%), and front- and middle-office support (39%).
Firms surveyed added that they see outsourcing not just as a way to save costs, but to enhance their businesses, including improving their focus on investment capabilities and alpha generation.
Firms are also looking to grow internationally, with nearly half (49%) of boutique asset managers planning cross-border growth initiatives in the coming 12-24 months.
About a quarter (23%) plan to enter new geographies, with 28% aiming to grow through the launch of new products in existing international markets, and some 19% considering mergers and acquisitions.
Key destinations for international expansion include: German-speaking Europe (48%), APAC (16%) and UK/Ireland (14%), although the survey found a regional bias in such objectives.
Managers in Central Europe are largely focused on expanding into German-speaking markets (69%), while those in the US show strong interest in APAC markets (53%), and UK-based firms are more focused on domestic and adjacent growth, with 40% targeting the UK and Ireland.
“In the UK and US, 37% of managers cited evolving US-led trade policy, and particularly tariff uncertainty, as a catalyst to focus on diversifying their investor base internationally,” Universal Investment noted.
Structures
Perhaps unsurprisingly, the majority of respondents in the UK and Europe picked out UCITS (88%) and AIFs (23%) as the structures of choice.
US managers tend towards AIFs (60%), with 53% there also using non-regulated structures, which the survey found were “hardly considered at all by UK and European managers”.
