BOSTON—The largest, and most successful, asset managers are structured as partnerships, Bob Pozen, chairman emeritus of MFS Investment Management, told Fund Forum USA’s Global Fund Distribution Summit here Monday.

The heyday of fund supermarkets, and the flurry of mergers and acquisitions that followed them, is over. Today, clients are looking for dedicated asset managers, Pozen said.

“The financial supermarket model that was underlying all of the active mergers and acquisitions activity of the 1990s proved not to be a good model,” Pozen said. “It turns out, the customer rules. The customer wants choice, not an affiliated fund. When I was president of Fidelity, 80% of the 401(k) assets were in Fidelity funds. Today, I would guess that’s 20%.”

An even better-working arrangement for asset managers is a private-public model, where a minority interest in a company is publicly traded, Pozen added. This way, the superior attributes of private partnerships can be paired with the fundraising capabilities of public offerings.

Probably the most beneficial aspect of a private partnership is giving management “an informal voice on key issues, which leads to fast decision-making,” he said. “Vanguard, Fidelity and American Funds,” the three largest retail asset managers in the U.S., are all essentially partnerships, he said.

Also key: giving partners stock in the business, not being burdened by public reporting and having continuity of ownership.

This is why there has been an increase in leveraged buyouts in recent years with the help of private equity firms, such as at Nuveen Investments and Marsico, Pozen said.

-- This article first appeared on Money Management Executive.