It can be notoriously difficult to maintain a competitive advantage in industries requiring a high degree of intellectual and human capital.  After all, ideas (and people) are free to seek the highest possible return – where ever that may be.  This usually means that the behemoths with the deepest pockets and greatest career opportunities can, given enough time, build their own businesses to compete in new and burgeoning markets.

That is, assuming they have the luxury of time.  Some markets evolve so quickly and are so scalable, that there is simply no time to build a new business from scratch.  So larger players begin falling over themselves to buy their way to a first mover advantage.  Witness many of Google’s acquisitions.  Sure, the Googleheads could have built any business they wanted by just going out and hiring the right people and throwing money at them.  But they obviously felt that establishing a beach head in, say, video sharing, couldn’t wait.  Ergo, the YouTube deal.

It’s in times like these when the small fry can hold a major trump card – they’re already established and they have proven experience with these new technologies.  And that’s pure gold for the established players.

Sun Trust, the $175 billion US bank, may not be a Google.  But like Google, it knows when to pounce quickly on a new idea.  Via its asset management subsidiary, Trusco Capital Management, the firm wasted little time last week as it bought a minority stake in Hartford-based Alpha Equity Management, a relatively small firm that had one thing SunTrust couldn’t possibly build in the next year or two: six years of experience running 130/30 funds.

More…