Sat, Sep 22, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Seeders embrace capacity constrained strategies

Friday, April 20, 2018

Bailey McCann, Opalesque New York for New Managers:

Active management has always had a problem with diminishing returns at scale. Now one seed funding platform is actually telling managers that 'assets are the enemy'. Delegates at the recent Opalesque Connecticut Roundtable argue that it's more important for emerging managers to focus on performance.

"I think that traditionally seeding has been about scale," says Don Rogers, Founder and Managing Partner, Stride Capital Group a hedge fund seeding firm. The bigger a manager gets - Rogers argues - the better the economics for a seed investor, regardless of what happens to other LPs. But now that the market is more crowded, perhaps the model needs to change.

"Today, finding new teams that can compete with very large, very sophisticated, well-established competitors that dominate a lot of sectors in a very liquid market is very hard. So rather than replicate what has been successful in the past, we try to find new, unique areas of opportunity around the world. Sometimes those areas may even be capacity constrained," Rogers explains. "Our main aim is sustainably higher returns for LPs, not scale."

In order to compete in a saturated market, new managers may have to be willing to run smaller more dynamic funds in order to stand out.

"Investors and managers really have to understand the issue of strategy capacities," says ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. The incredible shrinking hedge fund, For hedge fund stars, being right in 2008 proved to be a curse[more]

    The incredible shrinking hedge fund From Bloomberg: You'd be forgiven for thinking the hedge fund industry might be starting to rebound. Industry assets are at a record $3.2 trillion this year, and a brand-new ?rm just brought in an unprecedented $8 billion. But the reality isn't so rosy.

  2. Investing: Fiat Chrysler attracts more investment from hedge fund manager[more]

    From Autonews: Chase Coleman's Tiger Global Management has invested more than $1 billion in Fiat Chrysler Automobiles after more than doubling its position in the automaker since the end of June. The U.S. fund becomes the fourth biggest investor in the Italian American company. Tiger Global inc

  3. SWF: Saudi Arabia's sovereign wealth fund raises $11bn loan with 15 banks[more]

    From Reuters: Saudi Arabia's sovereign wealth has raised an $11 billion loan from a total of 15 banks, the Maaal financial news website reported on Tuesday, citing unnamed sources. A source with direct knowledge of the matter told Reuters last month that the Public Investment Fund (PIF) will p

  4. Hedge fund billionaire spells out America's worst nightmare, Sir Michael Hintze: Response to global financial crisis elevated populism[more]

    Hedge fund billionaire spells out America's worst nightmare From SMH: Billionaire hedge fund manager Ray Dalio effectively spelled out what doomsday looks like for the US on live television. The founder of Bridgewater Associates predicted the US economy is about two years from a downtur

  5. Lehman's carcass has handed huge profits to distressed funds[more]

    From Bloomberg: It was a bold move: buy at Lehman Brothers's darkest hour. But a decade after Lehman's collapse, a handful of hedge funds that bought up the bank's debt for pennies on the dollar have made even more money than seemed possible. More than $124.6 billion has flowed to Lehman credi