New Managers September 2012

Fundana Series - Has the set-up of new launches changed over the last few years?

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Has the set-up of new launches changed over the last few years? Bruno Guillemin The Fundana series of articles discusses Investments in Emerging Managers; it derives from the real world experience of the Fundana team. Fundana is the investment advisor to several Funds of Hedge Funds and directs at least half of its new investments to Emerging Managers. The investment process typically involves allocating a small amount Day 1 or Early Stage (defined as less than one year after the fund's launch) to new managers who have strong pedigrees.

The objective of this series of articles is to share thoughts around our key observations. It does not aim to be "statistically significant" but to create a dialogue around those observations.

The Emerging Managers space is currently in vogue. Following the 2008 credit crisis, allocators focused first on the opportunity to invest with previously hard-closed Blue Chip hedge fund managers. Now that most of those funds are hard-closed again, investors are taking another look at Emerging Managers.

Following the new financial regulations and the well-advertised increasing number of launches from ex-bank prop desk teams, this article looks at the set-up and the framework of the organization of new hedge funds when they launch. This encompasses the size of the team, the number of risk takers, and the previous portfolio management experience of the managers. The goal is to identify any differences between the pre- and post-crisis environments on the structure of new hedge fund launches.......................

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