These days, news about the hedge fund industry is either positive or negative. Either the press is writing story after story about the insider trading scandal or the how a manager is attacking a board of directors or it’s writing stories about how assets keep flowing into hedge funds from investors around the globe. There’s no in-between news; it’s either really negative or really positive. And while it may not be news, it seems that managers, specifically those who are just starting out or those with less than a half a billion under management, are having a heck of a time trying to raise assets. Click here to read about asset flows.
During last week’s HEDGEAnswers conference call, we discussed the steps it takes to launch a successful new fund. The reality is that many people–lawyers, accountants, administrators, prime brokers and more–willing to help get the structure up and running, but when it comes to raising assets it seems managers are on their own.
It’s interesting to me that as the industry continues to become more and more mainstream, managers are still faced with the same problem: raising money. I believe that one of the reasons for this is that managers are lazy; they believe that because they built it, investors want it. Managers expect money to flow into their funds like water flows into the kitchen sink. This is just not the case. Investors want a reason to invest in a fund. Managers need to be able to tell a story and provide information so that investors can make an educated decision. If you build it, they most likely will not come–understand that and you are ahead of the game. We will be spending a significant portion of the MarchHEDGEAnswers Launch Session Call on marketing. Register today by clicking here and get in on the discussion.
THINGS THAT ARE DRIVING ME CRAZY
Remember to bring some money for parking the next time you get sick in Summit, N.J., and drive yourself to Overlook Hospital. It seems that times are so tough there that the hospital is charging patients and their visitors to park. I guess it’s just another example the cost of healthcare getting out of control. I am not sure what it is, except to say that it is wrong. I mean, really, is it necessary to charge people to park in the suburbs? Come on. It is rare to go to the hospital for something pleasant, and this just makes it worse.