Fri, Apr 20, 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. Investing - Sequoia takes Facebook stake as shares slide in data controversy, $1.4b hedge fund sees intact fundamentals for Facebook, Jim Cramer reveals some 'suggested hedge fund trades' amid the Trump tariffs[more]

      Sequoia takes Facebook stake as shares slide in data controversy From Bloomberg.com: The $4.2 billion Sequoia Fund bought a small position in Facebook Inc. as the stock slid late in the first quarter, investment manager Ruane, Cunniff & Goldfarb told clients. "The recent controversy enab

    2. Activist Investors - Blue Sky-owned Wild Breads faces uncertain future[more]

      From AFR.com: A Blue Sky private equity investment in artisan-style baker Wild Breads enjoyed multiple valuation upgrades despite losing millions and breaching its lending covenants, accounts lodged with the regulator last week show. Wild Breads lost $2.4 million in 2017, but Blue Sky ascribed a hig

    3. Opalesque Exclusive: Barnegat to close hedge fund to outside investors on weak opportunities[more]

      Komfie Manalo, Opalesque Asia: Bob Treue's Barnegat Fund Management said it is closing its $666m fixed income relative value hedge fund to outside investors. "The negative side to gains in Fixed Income Arbitrage is that unless we find new opportunit

    4. Investing - Hedge fund makes a big bet on malls, British hedge fund manager Odey short UK government bonds on QE bet[more]

      Hedge fund makes a big bet on malls From Barrons.com: The dominant narrative on American shopping malls is that they're dead. Crushed by Amazon.com, many brick-and-mortar retail stores are destined for bankruptcy. And where is the most retail, clustered all together? Malls. From a

    5. Performance - Hedge funds suffer first back-to-back loss in two years, Netflix performance burns hedge fund short sellers, Macro hedge fund up 14.5% in first quarter sees dollar falling, Renaissance Technologies rebounds across hedge funds in March[more]

      Hedge funds suffer first back-to-back loss in two years From Bloomberg.com: Hedge Fund returns sank for a second straight month in March, the first back-to-back loss since the first two months of 2016, as trade wars, tech-sector woes and a Fed rate hike dragged down the S&P 500 from its