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Komfie Manalo, Opalesque Asia: A lot of hedge fund managers who are just starting up often neglect the
concept of succession until it is too late, said Corey McLaughlin,
Managing Member at CPA and advisory firm Arthur Bell,
during the latest 2016 Opalesque Investor Roundtable.
"My suggestion would be to check and ensure that a manager can continue
to be effective with his trading activities, research, and regulatory
filings if there are key personnel departures. Managers should ask
themselves questions like, 'Are the investment processes repeatable, or
do they rely on a single person? Is someone of such a significant
influence that if that person were to leave, there would be no one to
fill that void?’," said McLaughlin.
McLaughlin underscored the importance of succession plan, which he said
is vital for a fund manager and their investors, because it ensures the
ability of the organization to handle disruptive or catastrophic events,
which makes the business far more sustainable in the long term. A
forward-thinking approach from day one is critical in order to protect
your business and your employees.
The subject of a succession plan applies particularly to emerging
managers who should consider how the transition of ownership will
function in the future also from a financial standpoint.
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