Bear markets no barrier to boutiques development: Cuddy
A bull market is not necessarily a better time to launch a boutique than a bear market, according to Paul Cuddy, chief executive of new boutique fund manager Bennelong Australian Equity Partners (BAEP).
BAEP was launched by Bennelong Funds Management in August last year by ING’s former co-equity heads, Cuddy and Mark East, and has been operating for the past four months.
The boutique, which offers the Australian Equities Fund and the Concentrated Australian Equities Fund to the retail and the institutional market, is “ahead of where we anticipated at launch” in terms of client numbers, Cuddy said.
He attributed this development partly to the institutional market being “quite active in reconsidering their line-up of fund managers”.
Discussions Cuddy is having with existing and potential clients suggest the groups “like to see how managers perform in both bull and bear markets”.
Another factor relates to the fact they have had managers who have performed well in bull markets, but not so well recently, making them reconsider their manager mixes, Cuddy said.
“There are quite well known names out there that are going through involuntary cutbacks and they are restructuring their businesses because of the tough markets.”
Boutiques remain a “compelling story in a bear market as long as you have a value adding proposition that has some differentiating features and you have some strong capital support across an appropriate timeframe”, he said.
Recommended for you
The shift in scale and consolidation has led to substantial growth in large privately owned licensees, which have tipped past 20 per cent of advisers for the first time to make up 28.3 per cent of the industry.
ETF providers Betashares and BlackRock are reporting increased flows for currency hedged vehicles, but an adviser has warned on the potential tax implications of changing currency.
Bravura chair Matthew Quinn is to step down later this year, following the exit of CEO Andrew Russell, while its future priority is digital advice in Australia.
Financial advice has an important role to play in navigating family discussions around inheritance, according to CFS, with younger generations expecting a windfall of more than $500,000 while older ones try to meet their retirement needs.
