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Rise of the super boutique: how will this new breed of firm fare?

by Elsa Buchanan on Apr 07, 2014 at 14:38

Lord North Street co-founder William Drake explained the deal was not driven by a desire to bring about cost savings, but a motivation to capitalise on the combined strengths of the two organisations to ‘raise the game so that London has an absolutely world class private investment office’.

NCI welcomes rise of 'super-boutique'

The New City Initiative, a think tank representing fund and wealth management boutiques has welcomed both tie-ups, with its founder Daniel Pinto calling for more consolidation through the creation of super-boutiques.

‘We applaud all these transactions because we think there were too many smaller players in the industry and we think the creation of larger boutiques is probably a good thing,’ he said.

Before setting up the NCI, Pinto co-founded Stanhope Capital, which became the largest private investment office in Europe running over $9 billion (£6 billion) and employing 70 staff.

‘The movement is driven from clients, who are increasingly sensitive to the breadth and depth of your investment expertise. It used to be that they were satisfied with just a few people handling their investments – but they are much more demanding now.

‘That’s the reason why the smaller players in the industry feel a need to come together to potentially invest more in their investment research capabilities,’ he explained.

The chief executive says the boutique has enjoyed very strong growth over past few years because Stanhope addressed early on the need to populate the investment team with the right people. This was done through hires rather than acquisitions.

There are 18 staff on the firm’s investment research department, which Pinto says is ‘as much as the total number of employees in many of these [small] firms’.

‘Our view has been that, because we chose organic growth [over an acquisition], we had done the right thing in terms of focusing on the right elements of investment research.’

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