83% of investors would be more likely to allocate to a specialist investment manager via a multi-affiliate partner, according to a survey by Fidante, the multi-affiliate investment management business.
According to the findings of the survey assessing European institutional investor attitudes towards allocating to specialist investment management businesses.
The survey, which included 229 European investors, highlights the pivotal role of the multi-affiliate model in institutional investors’ decision-making processes.
The results indicated a strong appetite for more specialist managers in a market dominated by larger multi-asset managers. Nearly 60% of investors believe the asset management industry is saturated with large multi-asset investment managers, and 64.6% feel the market lacks specialist managers.
Asset managers show signs of shift towards investor-centric strategies
Over 65% of respondents agreed that specialist investment managers are more agile and better able to capitalise on investment opportunities in their sectors compared to larger multi-asset managers. Among those who prefer allocating to specialist managers, 31.9% cited a “greater chance of achieving better returns” as their primary motivation. Additionally, 24% valued the “deeper experience in an asset class” and 23.1% appreciated the “more innovative” approaches of specialist managers.
Despite their appeal, specialist investment managers are perceived as higher risk compared to larger multi-asset managers, according to the findings. Concerns include increased regulatory and compliance risks, ESG compliance risks, and M&A or takeover risks.
Asset managers pursue more targeted product strategy to drive distribution
The multi-affiliate partner model is seen as a solution to these perceived risks. According to the survey, 83% of respondents would be more likely to invest in a specialist manager supported by a multi-affiliate investment management partner. The benefits of this model include reducing compliance and regulatory risks, mitigating ESG and greenwashing risks, and allowing managers to focus on informed investment decisions.
Adam Brown, general manager and co-head of global distribution at Fidante Partners, commented: “Institutional investors understand the key advantages of specialist investment managers, from their innovative approaches and sector-specific knowledge to their ability to generate outsized returns. However, they are also aware of the risks.”
