Sun, Dec 21, 2014
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. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

      Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

    2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

      Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

    3. Investing - Hedge funds get boost from healthcare in 2014, Paulson & Co takes stake in Salix on heels of inventory issues[more]

      Hedge funds get boost from healthcare in 2014 From Valuewalk.com: The healthcare sector started the year on a turbulent note, as stocks of many major biotechnology companies were battered. However, most of the players in this sector have bounced back. The BarclayHedge Healthcare & Biotec

    4. Opalesque Exclusive: U.S. legal receivables fund launched in August[more]

      Benedicte Gravrand, Opalesque Geneva for New Managers: Investing in asset-backed receivables is a strategy that has been an integral part of the alternative investment space within the overall fixed income asset c

    5. Comment - High fees and low performance hit hedge funds[more]

      From FT.com: Disenchantment over high fees and lackluster performance may finally be turning the tide against hedge funds, fresh data suggest. Despite generally weak returns since the global financial crisis, hedge funds have enjoyed positive net inflows every year since 2010. This helped assets und