Life in a Boutique Firm: Pros and Cons for Women in Fund Management

by Elizabeth Harrin (London)

There’s more to fund management than the big players like Santander and Jupiter.  Fixed income boutique firms might be smaller, but they are more agile and offer different career opportunities.

“In a boutique firm, people may find themselves wearing many hats,” says Carolyn Dolan, founding principal at New York-based Samson Capital Advisors.  Samson is a fast growing money management firm designed to meet the special needs of affluent families, foundations, corporations and endowments.  The firm currently manages over $5 billion.  “This can be good as well as bad.  It is good in that a person is exposed to various parts of the business.  The negative is that one may have to worry about things that are taken for granted at a larger firm.  For example, during the past two weeks I have worked closely with an attorney on the lease for our new space,” she adds.

Finding the Balance: More Career Control, More Workplace Stress

The variety will suit some women, but it won’t work for everyone.  “Those who are more entrepreneurial and seek to control their own lives are better suited to a boutique firm,” says Dolan.  Even if you do have an entrepreneurial streak, you need to consider your personal circumstances.  Larger firms are more likely to have facilities like a crèche, and larger budgets for training and development.  Everyone plays a key part in small company – if you are off sick, it’s not so easy for the work to go undone or for a colleague to step in.  Reaching and maintaining a work/life balance in that kind of situation can be more difficult than with the support structures of a multi-national.  “When you are with a boutique firm it is hard to leave your work, particularly if you are one of the principals,” says Dolan. “The employees of a boutique oftentimes have an impact on the firm’s daily routine and long term goals.”

You also need to think about the client mix. “People invest in boutiques because they want fund managers to have the freedom to invest where they want and to express their conviction,” Philip Haddon wrote in Citywire earlier this month.  Boutique firms can offer a much more personalised service.  Fund managers will have to be much more aware of the individual client’s needs in order to choose appropriate investments.  It is rarely the case of picking a packaged fund product of the shelf and ‘making do’. 

In addition to that, high-net worth individuals and institutional clients can always speak to the right person – there’s no ‘relationship manager’ between the client and the fund manager.  “Our clients interact directly with portfolio managers rather than relying on relationship managers,” says Dolan.  “We believe it is essential for the people investing the clients’ assets to know the clients. It is the only way to ensure the proper match between our clients’ portfolios and their specific financial needs.”

Providing a more personalised service was one of the reasons that Judy Wesalo Temel, Principal and Director of Credit Research at Samson, joined the company.  She says that one of the best things about life in a boutique firm is the ability to create a shape a firm culture that reflects the mission and business principles of the boutique.  That has an impact on the bottom line and it is easy to see the individual’s contribution to the growth and success of the firm.

Dolan agrees.  “It is very rewarding to develop a firm that provides products and services that others need and want,” she says.  “In the process, you are creating employment opportunities for others.  Being able to create jobs and increase our revenues over the past two years is a feat by itself.”

Increasing revenues in these tough market conditions is something to shout about for any company, let alone one working with investments.  Boutique firms tend to specialise, so they are able to build up experience in a particular product.  “Given the size, boutique firms are non-bureaucratic and can make decisions more quickly,” Dolan adds.  That also means they can react more quickly to market conditions and stay ahead of the trend with new products or client offerings, all of which are very attractive propositions for customers in a challenging economy.

So is a boutique firm for you? 

Temel worked in public finance at Goldman Sachs for 17 years before she joined Samson, with a stint in the middle writing The Fundamentals of Municipal Bonds.  “The transition from Goldman, where there was a culture of team work and many people to assist and support you, to the life of an author, where you are a sole practitioner doing everything on your own, was an enormous change.  The combination of a deep and varied experience at Goldman, coupled with the entrepreneurial and self reliant spirit that I developed as an author was crucial in my decision to join Samson,” she says.

Dolan wouldn’t leave the world of boutique firms to work in a larger investment house.  Now she has found her niche, she’s holding on tight.  So what should women do who want to follow her lead into a boutique fixed income firm?  “Always keep up to date on changes,” she says.  “Align yourself with those who are passionate about their careers.”

Temel has some other advice for women wanting a career in a boutique money management firm.  “Acquire top notch skills, develop a core competency, and demonstrate a real intellectual interest in and passion for the work that the firm does,” she says.  “Show people how you as a team member can add value to the firm and to the firm’s clients.”