Tue, Sep 17, 2019
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
New Managers June 2018

PERSPECTIVES: Three steps to success in hedge fund asset raising

 

Three steps to success in hedge fund asset raising

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

"Any hedge fund can be successful at raising assets if they excel at three things," he says. "The first thing they have to have is a superior product. And it has to rank well across each of the factors investors use. One of the big issues is that many hedge funds have no idea how investors select hedge funds; they think it's all about performance. I can tell you it's not all about performance. Performance tends to be a hurdle that you have to be above, and once you're above that specific hurdle, then all these other factors that investo......................

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. Albright Capital builds on emerging markets impact strategy, signs on to IFC principles[more]

    Bailey McCann, Opalesque New York: Albright Capital has adopted the International Finance Corporation's Operating Principles for Impact Management. The firm has also developed its own impact measurement system as part of the implementation of the principles. The IFC's principles were

  2. Investing: Hedge funds getting burned as growth stocks trounced by value, Why investors are prioritizing health care in a big way, Fannie, Freddie soar as hedge funds score wins on two fronts[more]

    Hedge funds getting burned as growth stocks trounced by value From Bloomberg: A hedge-fund favorite is rapidly losing ground in the stock market just as one of the industry's least-loved sectors picks up. Growth stocks, generally companies that are seeing rapid profit increases, have drop

  3. PE/VC: Supersized unicorn: Root Insurance leaps to $3.65bn valuation with $350m round[more]

    Root Insurance is now valued at $3.65 billion after a $350 million funding round - the largest single venture capital round ever in the state. The 3-year-old auto insurer, now the startup with the highest valuation of any in Ohio, has raised a cumulative $523 million in VC and another $100 mi

  4. Testing hedge performance when stocks crash[more]

    Bonds have historically been a reliable buffer for stock exposure. But low yields and potential reversion to a more positive stock/bond correlation would likely translate to less protection. Gold has been a solid crisis hedge but has experienced long stretches of negative inflation-adjusted returns.

  5. PE/VC: The FBI is investigating a venture capital fund started by Peter Thiel for financial misconduct, Why venture capital firms need more women partners and entrepreneurs[more]

    The FBI is investigating a venture capital fund started by Peter Thiel for financial misconduct From Vox: Federal investigators are probing the conduct and practices of Mithril Capital, a venture capital firm co-founded by Peter Thiel, Recode has learned. US officials - including t