AXA CIO defends boutiques

There remains an appetite among most funds to include boutiques in manager line-ups, despite the current market downturn, according to AXA chief investment officer Mark Dutton.

Reacting to recent reports of potential widespread rationalisation of fund managers, Dutton said he believes the appetite has "not particularly increased or decreased" during the downturn.

"I think most funds would agree there's a potential role for boutiques in their manager line-ups."

He said that boutiques, as a group, have "done reasonably well throughout the last year or so, although there's been quite a mixture of performances".

"In many cases multi-managers are actually looking for diversity of performance: you want a portfolio of returns that are produced in various conditions at different times."

However, the diversity of performance during the past year by "all managers, big and small, will be something all funds will be assessing in considering their line-ups", he said.

"The question is whether they will still have confidence in a particular manager's approach, given the way the portfolio has been managed during the period."

Dutton said some funds are now also subjecting boutiques and larger managers to a business test to assess the impact on their businesses of the downturn in market valuations and therefore FUM and revenue.

"For boutiques, the test is if they can remain viable and resource themselves properly, while for larger fund managers it's whether they will still resource properly if they cut back on expenses," he said.