3 Advantages for boutiques

David didn't beat Goliath with an army and an arsenal. He beat Goliath with unique ability, his advantage: the slingshot.

You can’t beat the Bigs by playing their game. You gotta find your slingshot. Here are three advantages for Boutiques:

1. Employee ownership

Bigs are about the big "players," the "seasoned" execs, the outside capital from other Bigs to keep the big wheel turning. A small group of top brass call all the shots and usually the shots are about gathering assets not managing them well.

Boutiques can differentiate by putting the power in the hands of the people managing the money, doing the work, building the company. Decisions are made together not sent down from on high. Boutiques believe in best interests of all, aligning mission, team, and clients.

2. Invest personal capital

Investors want to invest with you, alongside you. They want to know you are eating your own cooking. If Bigs have 45 different flavors of funds, can the PMs and stakeholders really have a meaningful percentage of their personal capital in all of them?

Boutiques can differentiate by putting their eggs in the basket alongside their investors in a meaningful way. It's alignment of interest. If the PM makes a decision, it impacts all investors and the PM is one. If we win, we win together and when it's tough seas, they are tough for us. Us not them.

3. Limit capacity

To Bigs, more is always more. Strategy generating great performance? Quick. Tell everyone. Then tell more people. Open the flood gates. (We know how that story ends.)

Boutiques know their limits. They can prioritize generating investment returns over generating fee revenue by soft-closing strategies before alpha degradation occurs. They can reward early adopter investors, protect capital and maintain the sanctity of the investment process. Boutiques know less is sometimes more.

There is white space for Boutiques to step into. Let's be brave enough to do it.