“They had too many managers. Put them together, and they had a low tracking error and an index-like portfolio,” Giddy said.

Cannae, which launched in November 2007, was now sustained by Treasury Group’s 40 per cent stake in the business and the supply of working capital, which has a 10-year maturity, the backer provides.

“Does it spell doom for my business? No. I’m disappointed, but not stressed. But it does signal that things are difficult for boutiques.”

Giddy said the move to beta entailed cutting an emerging manager program, which signalled that newer boutiques could be falling out of favour with institutions.

de Lorenzo said the redemption had a “very severe” impact on Alpha, affecting its ratings with consultants and stripping it of a major portion of revenue.

He said consultants would watch the performance, costs and operations of the boutique as it adapted to a lower revenue base.Giddy was more upbeat about the prospects of the boutique he managed.

“Although we’re still small, we’re building up a track record, so we’re not an unknown entity. Who’s to say that AustralianSuper will never give us money again?”

Small-cap manager Kinetic Investment Partners, which lost a $216 million mandate from AustralianSuper, has since re-opened its emerging companies fund to the institutional market.

"We’re going to existing clients first, and then to the market," Michael Lovett, general manager of boutique partnerships at Challenger, Kinetic’s incubator, said.

He said the boutique would not offer discounted fees in its efforts to garner more institutional money

With an institutional backer in Challenger and about $300 million remaining in funds under management, Kinetic’s three-person team was "a little more insulated" from the impacts of the AustralianSuper redemptions than other boutiques, Lovett said.