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Alternative Market Briefing

Plenty of hedge fund managers neglect concept of succession until it is too late

Thursday, October 20, 2016

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.

"For example, ......................

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