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Alternative Market Briefing

Three steps to success in hedge fund asset raising

Tuesday, June 26, 2018

Benedicte Gravrand, Opalesque Geneva for New Managers:

How does one get a lead in the extremely competitive environment that is the hedge fund industry - especially funds of under $100m? Don Steinbrugge, a veteran asset raiser and head of US-based marketing firm Agecroft Partners, says it is entirely possible to do so, so long as one follows all of three principles.

It is indeed a lot harder for smaller hedge funds to raise assets, he says during an interview on Opalesque TV, quoting a Preqin study that found that less than 2% of investors' flows go to hedge fund managers with less than $100m in assets. And since most hedge funds are under $100m, "the majority of hedge funds are going after 2% of assets."

"Part of the reason is the make-up of the hedge fund investor has evolved over time," he explains. "From 2000 to 2008, most flows were going from funds of funds, family offices, HNWIs. And since then, pension funds, endowments, foundations, sovereign wealth funds have been dominating the asset flows. And a lot of those investors are looking for larger managers to allocate to." So smaller hedge funds have to work a lot harder to build their brand.

Three factors that will mean success for any hedge fund ......................

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