Australian boutique fund managers have experienced a 33 per cent rise in funds under management during 2004, according to an annual survey b...

Australian boutique fund managers have experienced a 33 per cent rise in funds under management during 2004, according to an annual survey by Vaughan & Associates, a research consultancy. The consultancy said many boutiques are now in the second phase of evolution. Vaughan & Associates predicted new challenges including performance issues such as the temptation of some firms to spread their investment strategies in response to the growing demand for concentrated portfolios. Firms may also be tempted to enter the leverage market as demand for domestic hedge fund capacity increases. “Firms in our database generally concentrate on traditional core commodity asset classes but in recent times we have seen the emergence of absolute return type investments which may appeal to the high net worth channel and financial advisers,” said Vaughan & Associate’s principal Dr Vaughan. Research also revealed the number of new start-ups continued through 2004 and into 2005 with several equity boutiques opening their doors over the past six months with close to 100 in the market excluding hedge funds.