strong' />

New Zealand's reasonably strong and expanding contingent of boutique fund managers generally punch above the benchmark-weight.

But sometimes, it seems, they just punch.

According to persistent and widespread industry rumours, tension between two colleagues at a high-profile boutique funds management shop recently boiled over into full-blown fisticuffs (a perfect word for such an, alleged, conflict, combining the aura of street-level violence with the gentlemanly image of cufflinks).

While multiple sources all agreed the confrontation did, in fact, take place, there was little consensus on why.


Some say it was a pure case of bonus envy. True, NZ boutique fund managers don't generate the kind of income that has attracted a stream of negative press for Bill Gross, head of the world's largest bond fund, Pimco - but they do ok. (Gross's alleged $200 million salary isn't enough, according to this article in Forbes.)

Others claim the conflict was simply a professional disagreement over portfolio positions that went a little too far. It might be difficult for the layperson to approve of fund managers laying into each other to determine the Xero allocation but this is a serious business. And, as investors, you'd probably want the managers to make a passionately-argued case for what to do with your money.

An alternative hypothesis has it that the fracas was more likely an outbreak of physical in-house politics with two contenders jostling for consideration as the next number one of the organisation in question.

There is, however, little support for the view that the two men (of course they are) turned on each other after debating whether to adopt a more passive, benchmark-aware approach to their funds management process.

But if they ever wanted to launch a Very Aggressive Fund...