Wed, Aug 5, 2015
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. Activist News - Celgene says patent-fighting hedge fund manager wants to short its shares[more]

      From Reuters.com: Celgene Corp, one of the world's largest biotechnology companies, has accused U.S. hedge fund manager Kyle Bass of attempting to profit from his attempts to wipe out several major drug patents through his Coalition for Affordable Drugs. The company asked the U.S. Patent and T

    2. Einhorn's Greenlight Capital hedge fund slumps 6.1 percent in July[more]

      From Reuters/Thefiscaltimes.com: Hedge fund mogul David Einhorn's Greenlight Capital slumped 6.1 percent in July and is now down 9 percent for the year after gold, one of the fund's top holdings, tumbled to five-year lows last week. Greenlight notified clients of its returns late on Friday, ac

    3. Performance - Some hedge fund small-cap energy stocks have been free falling, Dan Loeb's simple strategy destroys the market, Baupost lost 1.4% last quarter as energy bargains proved elusive[more]

      Some hedge fund small-cap energy stocks have been free falling From Marketrealist.com: According to a July 28, 2015, Bloomberg article, there was a 34% fall in small-cap energy stocks over the past three months. These shares are tracked by the Russell 2000 Energy Index. Small-cap energy

    4. Legal - Hedge funds hit Rothstein Kass with $75m malpractice suit, JPMorgan questioned on private bank’s hedge fund disclosures, Kijani fund, seized by regulators in Cayman Islands, spotlights risks in lightly regulated market[more]

      Hedge funds hit Rothstein Kass with $75m malpractice suit From Law360.com: Two investment funds have sued Rothstein Kass & Co. PC for at least $75 million, claiming the New Jersey auditing firm committed accounting malpractice by failing to properly scrutinize overblown valuations of the

    5. Assets - Hedge funds are getting smoked by the commodities slump, Global ETF assets could more than double by 2020[more]

      Hedge funds are getting smoked by the commodities slump From Businessinsider.in: The collapse in commodity prices has burnt another hedge fund. Vermillion, a commodity hedge fund backed by Carlyle Group, has seen its flagship fund's assets fall from nearly $2 billion to less $50 million,

     

    banner