Fri, Feb 23, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
New Managers October 2012

Focus - Why do emerging managers fail?

 

Why do emerging managers fail?

Why do emerging managers fail? The simple answer would be it is because they fail to raise assets to a level that supports their business. And this failure, according to Autumn Capital, usually falls into one of three categories, namely (1) capital mistakes, (2) business mistakes and (3) strategy mistakes.

Capital mistakes relate to the process of raising capital and managing investors, or to the capitalisation of the management company. Business mistakes relate to the actual business of running a hedge fund management company. And strategy mistakes relate to the investment activity of the fund that the manager is running.

Autumn Capital Partners is a London-based investment consultancy firm founded in 2009, which currently advises hedge funds and institutions; it has a focus on emerging products and advises investors on early-stage hedge fund investments.

Top ten reasons for failure

Autumn's partners have recently drawn a list of the top ten reasons why emerging managers fail - and here they are:

  • Under-estimating the challenges
  • Lack of clear definable alpha
  • Inability to communicate
  • Wrong team
  • Wrong time
  • Under-investment
  • Assuming that all investors are equal
  • Lack of transparency
  • Greed
  • Fear
  •  

    The overwhelming majority of emerging managers will be loss-making businesses in the first three yeas of their existence, concludes Autumn Capital's presentation on the top ten reasons for failure. And some of the typical reasons for failure are not curable. But the good news is, many of those mistakes can be avoided. ......................

    To view our full article please login

    This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
    New Managers
    New Managers
    New Managers

    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. Art & Motion launches collectible car alternative investment vehicle[more]

      Komfie Manalo, Opalesque Asia: Luxembourg-based Art & Motion has launched a new investment vehicle dedicated to vintage cars and exceptional high-quality vehicles as this collectible market has grown exponentially the turn of the centu

    2. Opalesque Exclusive: Global Sigma captures February's long-vol trade[more]

      Bailey McCann, Opalesque New York for New Managers: Florida-based Global Sigma rode February's volatility to new highs. The firm's AGSF strategy is up +2.8 percent through February 16 and +4.2 percent YTD a

    3. Institutional Investors - Hedge funds regain their appeal for a $57 billion asset manager, Private credit strategies in stratosphere[more]

      Hedge funds regain their appeal for a $57 billion asset manager From Bloomberg.com: With volatility back on the radar, one of the Nordic region's biggest asset managers is considering relying a bit more on hedge funds to help oversee his portfolio. Mikko Mursula, the chief investment off

    4. Investing - All aboard for hedge funds as trade tide lifts shipping, Hedge funds pile into Time Warner in bet on merger success[more]

      All aboard for hedge funds as trade tide lifts shipping From Reuters.com: Forced to abandon ship after mistiming their investments five years ago, hedge funds are venturing back in a bid to profit from growing global trade flows. Around 90 percent of traded goods by volume are tran

    5. Investing - Hedge funds turn short on tech just as stock rally takes off, After biggest short, speculators slash bearish US bond bets as supply deluge looms[more]

      Hedge funds turn short on tech just as stock rally takes off From Newsmax.com: A key group of investors has just missed out on the biggest tech-stock rally since 2014. Hedge funds and other large speculators turned net short on Nasdaq 100 Index futures for the first time in 21 months, ac