Why Aren't There More Boutique Fund Managers?

In April, I had the opportunity to speak with three individuals who are at the forefront of UK-based boutique fund managers. The funds they help run and develop have all been featured in previous episodes.

Jamie Carter of Variis is a veteran of the boutique landscape, having helped form Oldfield Partners. He is now the CEO of a London partnership developing an emerging markets strategy, primarily targeting US endowments. The Variis CIO, Leila Cardouche, in an episode from October last year, illustrated the huge potential that an actively managed EM strategy offers.

Ed Hugo partners with Alyx Wood at Kernow Asset Management, where they are having success running a long/short UK equity strategy. Alyx last appeared on the pod in November 2023 to discuss why it might be a good idea to invest in the UK.

Meanwhile, Jackson Wray joined Dowgate Wealth in a business development role for its two UK value strategies, Onward Opportunities, a pro-active microcap strategy managed by Laurence Hulse (also last on the podcast in November 2023) and Cape Wrath, a concentrated UK deep value fund managed by Adam Rackley (who appeared in Market Capitulations and Narrative Shifts in June last year). Jackson was previously a professional rugby player with Saracens before retiring in 2023, and he draws some interesting comparisons between the worlds of competitive sport and asset management.

All the funds these managers oversee have successful track records, but what are the challenges when it comes to setting up, complying with regulations, growing AUM, and how do they handle things when the going gets tough, not according to plan?

These are the thoughts of three people who live and breathe these issues, and it is a fascinating discussion with some interesting pointers for anyone considering setting up themselves.

Ed says you need to be mad, Jamie says the regulators could do more to help, and Jackson stresses the importance of being honest with yourself and your teammates.

For full disclosure, I have investments in the Kernow Equity Fund, Onward Opportunities, and the Cape Wrath Fund.

And before we get into it, here’s the disclaimer: none of what you are about to hear constitutes investment advice, but rather is provided for your information and entertainment. You should seek personal and professional financial advice before investing a penny of your money in these volatile markets.

Please enjoy my conversation with Jamie, Ed and Jackson.