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Bailey McCann, Opalesque New York for New Managers: As Opalesque reported earlier this week, a new research paper from London’s City University, makes the case for emerging managers. Using the Thomson Reuters Lipper Hedge Fund Database, researchers Andrew Clare, Dirk Nitzsche and Nick Motson show that as hedge funds grow in asset size and age they see a notable performance drag. The paper confirms many of the assertions of similar research on these topics.
In the paper, authors argue that as hedge funds grow in assets under management performance begins to erode. Performance also begins to decline as hedge fund managers age. The two realities are interconnected, as one can safely assume that hedge funds that find themselves reaching milestone anniversaries have raised enough assets to keep the lights on. Still, monthly performance data shows that assets consistently flow to the largest funds.
Emerging managers have a notoriously difficult time raising assets with institutions owing to headline risk, diligence questions, and ticket size. In some cases, seeders step in to provide a solid platform, but for managers without a seeder fundraising can be tricky. Opalesque spoke with Peter Borish, Chief Strategist of Quad Capital, about their accelerator model and how it differs from traditional seed funding...................... To view our full article Click here
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