US giant Federated Investors has emerged as the favourite to acquire Edinburgh’s Artemis Investment. But could the corporate influence shatter the boutique culture?

In spite of running £15.7bn in assets under management, Artemis is tiny. It was founded in 1997 by Mark Tyndall, John Dodd, Derek Stuart and Lindsay Whitelaw and has since recruited 12 other asset managers.

Belgian Dutch bank Fortis acquired Artemis after it bought pieces of ABN AMRO last year, and now wants to offload it.

The management team at Artemis have so far been unable to raise the funds required take up Fortis’ offer themselves, so now numerous names have joined the fray – but the forerunner is US fund management giant Federated Investors, according to a Sunday Times report.

One headhunter thinks the American influence wouldn’t sit well at Artemis: “The boutique nature of the firm and their current flexibility is a big draw and that is bound to lead to disaffection if it goes. You can bet that I and every other headhunter around will be setting up to make approaches if the deal goes through.”

Flexible working is one perk rumoured to be enjoyed by the staff at Artemis, and fund managers are thought to be allowed to connect to the firm’s systems remotely and work from home on a frequent basis.

The successful bidder is likely to offer the founders lucrative deals to stay, and if these seep through to the other fund managers, the eradication of such comforts would pale into insignificance.

One headhunter cites the example of Walter Scott & Partners, the Edinburgh-based investment manager that was acquired by BNY Mellon Asset Management in 2006.

There, the boutique culture served its employees well and most were given a slice of the takeover pie: “I think even the cleaner got something then,” they quipped. “Whether this will happen with Artemis is hard to say.”