This week brought two major Opalesque Exclusives that reframe how institutional allocators should think about hedge fund manager selection. The first establishes mathematical proof that boutique managers outperform by 82-135 basis points annually. The second details how a veteran portfolio manager delivered 57% net returns in 2025 by bucking consensus and investing in unloved European banks while others chased AI stocks.

Comprehensive research from Affiliated Managers Group analyzing over 1,300 firms and 5,000 strategies establishes what researchers now call the Boutique Premium. This documented mathematical premium demonstrates that smaller asset managers deliver measurably superior risk-adjusted returns through advantages that larger funds cannot replicate.

The AMG study shows independent boutiques outperformed non-boutiques by an average of 82 basis points per year net of fees over a 20-year period. During high-volatility regimes, the boutique advantage becomes even more pronounced, with smaller managers outperforming by 116 basis points annually. This volatility edge demonstrates that nimbleness functions as a primary risk-management tool - when markets dislocate, smaller managers can reposition portfolios more quickly and exploit mispricings that larger funds cannot access due to liquidity constraints.

Research from Bayes Business School quantif......................

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