Now in its eighth year, AIMA’s Next Generation Manager Forum 2021 provided a virtual platform for a variety of speakers to share their expertise around various topics. Serena Desai, Assistant Manager, provides commentary on the event below.
Some of the topics addressed through the Forum included:
- Prime brokers and how next generation managers can get the most from them
- Platforms and their uses for next generation managers
- What you wish you had known before you started a hedge fund and what ’they’ don’t tell you
- Sales and marketing for next generation managers and what investors expect
- Characterisation of budgets for newer and smaller managers
It was insightful to hear the panellists talk about the ways in which the alternative investment management industry operates, and offer their experience on how to establish a successful business. Unsurprisingly, all topics featured in the Forum noted how much difference a year can make and how the COVID-19 pandemic has left a lasting impact on the industry.
Founding partners of established funds offered advice to new start-ups, which focused on setting a clear strategy for the fund and outlining desired first year achievements, as well as making sure that the strategy aligns with targeting potential investors. One key takeaway from this panel was the identification of common barriers to entry, including underestimating large set up costs, dealing with the expectations of investors’ requirements and the increased regulation in the sector.
Melanie Pittas, Partner and Co-Head of Financial Services, hosted a panel discussion on the characterisation of budgets for newer and smaller managers. This topic stressed how crucial it is to have detailed budgets and forecasts that stand up to the scrutiny of the regulators and investors and that they are monitored regularly in order to build a sustainable business. Do’s and don’ts in relation to cash outflows in the initial start-up phase of the fund were also covered, and warnings were made to not commit to any long term and inflexible arrangements – a clear message which, in the current climate, should not be underestimated.
A key highlight from the Forum was the importance of finding the right fit with key service providers (fund administrators, compliance and tax advisors, and auditors) from day one. Making an initial time investment in finding the people within these organisations who can cater to the size and cultural fit of your business will help to strengthen a secure foundation to grow the business in the long-term.
