Asset management boutiques turn to outsourcing and international expansion amid mounting commercial pressures

Boutique asset managers are doubling down on outsourcing and internationalisation in response to commercial and regulatory headwinds, aiming to scale efficiently and remain competitive, the 2025 Boutique Asset Management Survey from Universal Investment Group, a premier fund services platform and Super ManCo, has revealed.

The latest iteration of the annual, international survey covers responses from asset management boutiques across Central Europe*, the UK, and the US. It found that more than half (52%) of respondents plan to outsource at least one business function within the next 12-24 months, while a similar number (49%) are looking to expand beyond their home market to pursue future growth – through entering new geographies, launching international products, or pursuing mergers and acquisitions.

The data highlights how boutique managers are adapting their operating models to navigate increasingly complex conditions in the current investment landscape and region-specific challenges.

“The challenges asset managers face have intensified in the past 12 months,” said Marcus Kuntz, Group Head of Sales and Fund Distribution at Universal Investment. “As commercial pressures have increased and the direction of markets has become less certain, many organisations are seeking to streamline operations through outsourcing non-core functions, while others are taking bold steps to pursue growth in new and existing markets.”

“These dual strategies give boutique managers the best of both worlds, allowing them to focus on their core competencies, reduce their cost base, and deliver investment performance for clients.”  

Mounting pressure: competitive and regulatory forces

The main challenges driving these growth considerations across all regions are regulatory requirements, named by 71%, followed by increasing competition and margin pressure (41%), and differentiation in a crowded market (39%).

In Central Europe, the region with the most stringent regulation, the challenge of regulatory requirements was cited by as many as 86%. Growing demand for passive products (40%), a trend increasingly seen as a threat to the long-standing value proposition of active strategies traditionally offered by boutiques, and difficulty standing out in a crowded market (39%) came in second and third place in the region. In contrast, asset managers in the UK and US are primarily concerned about increasing competition and shrinking margins, with 67% identifying these as primary challenges.  

Outsourcing on the rise: a strategic lever for efficiency

Outsourcing is becoming an essential tool for boutique firms looking to optimise operations. 82% of respondents globally already use third-party providers – rising to 93% in the UK and US. The propensity to use third parties has increased significantly from last year when two-thirds (64%) said they would consider third-party providers for fund administration. Furthermore, over the past year, 43% of managers have increased their use of third-party providers to alleviate operational complexity and control costs.

Looking ahead, more than half (52%) of respondents expect to outsource some of their services in the 12-24 months, with the areas of focus named as:

• ManCo/Fund Administration – 68%
• Fund Marketing and Distribution – 55%
• Front- and Middle-Office Support – 39%

For many firms, outsourcing is not just a cost-saving measure—it’s a strategic move to enhance agility, sharpen focus on core investment capabilities, and preserve focus on alpha generation. 

International expansion gains momentum

Another route to future growth considered by boutique asset managers is internationalisation. Nearly half (49%) of boutique asset managers are planning cross-border growth initiatives in the coming 12-24 months: Nearly one in four (23%) plan to enter new geographies, while 28% aim to grow through the launch of new products in existing international markets. Another 19% are considering mergers and acquisitions, signaling that boutiques will take a deliberate, strategic approach to scale and resilience.

Top destinations for international expansion include German-speaking Europe (48%), APAC (16%) and UK/Ireland (14%). Regional variation is pronounced: Managers in Central Europe are largely focused on expanding into German-speaking markets (69%), while those in the US show strong interest in APAC markets (53%). UK-based firms, meanwhile, are more focused on domestic and adjacent growth, with 40% targeting the UK and Ireland.

In the UK and US, 37% of managers cited evolving US-led trade policy, and particularly tariff uncertainty, as a catalyst to focus on diversifying their investor base internationally.

To market their funds outside their home markets, asset managers overwhelmingly favour regulated structures. Among UK and European respondents, UCITS (88%) and AIFs (23%) stand out as the structures of choice. Meanwhile, US managers show greater preference towards AIFs (60%), with 53% also using non-regulated structures – something hardly considered at all by UK and European fund managers.  

“Best of both worlds” approach

The study shows an industry in transition. As the global investment landscape evolves, boutique asset managers are striking a balance between operational efficiency and global growth.

Marcus Kuntz concludes: “As we move into increasingly uncertain times marked by rapidly evolving trade relationships, those boutiques who embrace outsourcing and internationalisation can remain nimble, competitive, and poised for long-term growth."

“As a trusted partner to firms navigating today’s complex asset management environment, Universal Investment offers the infrastructure, scale, and expertise required to support boutique growth – whether through cross-border structuring, regulatory compliance, operational outsourcing, or marketing and distribution.”