Fund administrators look at business acumen, historical performance to gauge new hedge funds

Opalesque Connecticut Roundtable 2016.

(LEFT TO RIGHT ) Richard Rankin, Jason Brandt, Jeff Haas, Mark Fishman, Craig Melcher, Brett Houghton, Greg de Spoelberc

With a high shutdown rate for emerging managers, fund administrators are looking at a fund's historical performance and business acumen as key parameters in gauging when onboarding clients.

Speaking during the Opalesque 2016 Connecticut Roundtable, Jason Brandt, regional head of Fund Services, Americas at Maples Fund Services, added that his firm would assess if the manager's historical performance will be transferable and that he and his (new) team have the ability to generate returns also going forward.

He said, "Portfolio management experience is clearly a critical indicator of a manager's ability to succeed but most of the time managers are no longer simply running a portfolio. They are managing the business and everyone and everything that falls under that umbrella. Consequently, we have to screen for their business acumen and whom they will align themselves with in their third party outsourcing, including prime brokers, audit firms, law firms or outsourced compliance providers."

A fund manager's experience, performance history and business acumen will determine the fund's long-term survival and success. And once all these factors have been considered, a fund administrator is forced to take an educated guess to predict a person's success rate.

Brandt said managers need to have a strong business acumen and forward-thinking approach coupled with all operational and growth parameters modeled correctly in order to succeed. Maples Fund Services would work with fund manag......................

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.