Johnson&Company
Unique Clients. Distinctive Process. Intelligent Solutions.


Why New and Sub-$25 Million AUM Managers Work With Us: THEY GET RESULTS.


76.4% of hedge funds ‘TAP OUT’ their network of investors within 1 year

Source: How Hedge Funds Can Strengthen and Build Their Affluent Client Base
(Authors: Prince & Grove - Sponsored by Rothstein Kass)

81% of all managers have no marketing process.
89% of ALL hedge funds FAIL to reach $100 Million AUM.
Source:"Hedge Fund Survivorship Bias and Attrition" - The Journal of Alternative Investments (http://www.iijournals.com)

The #1 reason most new, unknown or smaller funds fail to raise assets: MARKETING.

 Inappropriate, Inconsistent, Inadequate and Ineffective Marketing = Chronic Failure Raising Assets.

The survival and success of ANY hedge fund as a business is dependent upon assets under management (AUM). 


As such, the acquisition, retention and expansion of AUM is the #1 priority of EVERY new and smaller manager. 

With that perspective, MARKETING is a critical process. However, almost every new and smaller manager has the misconception that raising assets and consistent AUM growth results from investment performance. Make no mistake, investment performance is ALWAYS crucial but alone it is insufficient to attract and retain assets in the post-Madoff/credit crisis world. Candidly, the demands and requirements by investors, consultants and advisors in manager evaluation and selection now extend well-beyond a narrow focus on investment performance. In fact, the allocation process is highly idiosyncratic and significantly more stringent as reflected by protracted due diligence.


Most new and smaller funds, even those started by individuals and teams with deep investment experience and outstanding pedigree, lack a clear and acute understanding of MARKETING in the "new" climate. The vast majority of sub-institutional managers are severely compromised in regard to the requirements, complexities and nuances of marketing. In fact, most new and smaller managers are under-resourced and unprepared to meet the challenges of appropriate qualitative and quantitative investor/intermediary engagement, which culminates with chronic failure raising assets.

Exceptional investment performance means nothing if the RIGHT investors and intermediaries don't know about the manager/fund along with a deep understanding of the enterprise-wide people, processes and skills that serve as the source of creating sustained investment performance and how those mechanisms support business sustainability. Moreover, if a new or small manager does not have the appropriate level of visibility, awareness and relationships among the most-suitable and qualified investor segments, it will not succeed raising assets.
                        
A Complete Commitment is MANDATORY To Succeed Raising Assets.

Despite all the attorneys, accountants, fund administrators, prime brokers and technology providers available to help launch and support a new or small manager/fund, when it's time for marketing and raising assets it's a solo effort. The responsibility of marketing and raising assets for new, early-stage and smaller managers is ALWAYS internal.

The truth of raising assets for a new, unknown or sub-$25 million manager boils down to a crucial fact:

IT TAKES MORE THAN INVESTMENT PERFORMANCE TO SUCCEED RAISING ASSETS.

"Marketing Alpha" is as important as Investment Alpha.

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