bfinance, a London-based institutional investment consultancy with a unique business model and a growing global presence, is taking steps to expand its business in the U.S. Having established a one-man office in Chicago last year—manned by Jason Pomatto, managing director—the firm plans to bring on half a dozen or so more staff in Chicago over the next six months to a year. “Initially, we are looking to extend the client consultant team in the U.S. Then the next step will be to build an investment manager research presence in Chicago as well,” according to Pomatto.
Since its establishment in 1999, bfinance has worked with hundreds of institutional investors, assisting them in their asset manager searches, but operating with a unique model in which it takes on the business risk of a manager search and the asset manager bears the ultimate cost of being selected, rather than the investing institution.
According to Pomatto, who reports to bfinance CEO David Vafai, the firm is seeking to build on its early clients in the U.S. and develop a broader base of institutional asset owners who seek independent assistance in manager search and selection. “We are seeking asset owners of all sizes and types of plans, with the goal of building a diverse client base that views bfinance as a trusted partner and will use us for multiple projects.”
The firm claims to deliver a customized “client centric” approach to fulfilling investors’ asset manager needs. Unlike more traditional consulting firms , bfinance does not maintain manager buy lists, which it says facilitates its ability to tailor manager search criteria for clients by drawing from a wider universe of managers, which improves outcomes for clients. bfinance earns fees only when a client selects an asset manager introduced by the firm (a commission on the assets awarded) which is paid by the asset manager.
“Given that there is no cost to participate in the tender for any manager—and that our fee is independent of the winning manager’s fee schedule—we are able to avoid any conflicts of interest in advising our clients in selecting managers. This fee is made completely transparent to clients as well as all managers that are invited to participate before we start the search process,” Pomatto said.
Pomatto joined bfinance last October from Driehaus Capital Management in Chicago, where he was a vice president in institutional sales.
Separately, as previously reported, bfinance recently released its 2018 Asset Owner Survey, which found among other findings that although the average investor has transitioned to a more complex portfolio, featuring greater use of nontraditional (and typically costly) asset classes, they have achieved savings that more than outweigh those additional expenses. As a result, the summary of the report’s findings says, average costs have fallen rather than risen.