Consultant Trends Toward Boutique Names

This article appears courtesy of Institutional Investor

Source: Fund Action

Independent consultants, a fixture of the defined benefit business but now an increasingly large part of the subadvisory market, are leaning toward recommending small boutique firms for subadvisory mandates. David Katz, partner at Rocaton Investment Advisers, said he likes to work with smaller boutiques, which often have an incentive ownership structure that favors long-term employment of portfolio managers and other key staff. He added that larger firms can often shift their investment and focus from one area of the firm–the area that may be a third-party’s subadvisor–to another more promising area.