There’s a lot going against those trying to launch a hedge fund these days. There’s the piss-poor performance industry wide, even among the crisis-tested, that seems to be scaring investors away from the sector over and above their need for ready cash to hoard toilet paper and yeast. There’s the negative publicity some people insist on stirring up by suggesting that hedge funds partake of federal handouts. There’s the fact that large, existing hedge funds run by people investors have heard of are making clear they’d like whatever money is being put into the space. And then there are the practical difficulties of launching amidst a quarantine, like being unable to travel or have would-be clients travel to you and such. And do not forget the smaller but still crucial obstacles to fundraising via Zoom.
“No one wants to see your messy house or the kids running around in the background,” he said. “You just try to do it in a quiet, nice-looking corner and make sure you’ve shaved.”
While having to observe a dress code even stricter than that imposed by NFL Draft rules is a drag, there are a few advantages. Some potential clients might be so bored that they’ll deign to read an e-mail from an upstart that a secretary previously would have dumped straight into the spam folder. And you can get a real feel for what kind of person you might be dealing with by having a look behind them and seeing how many signed copies of The Art of the Deal they’ve got.
“I’ve emailed chief investment officers of foundations and endowments directly and I’ve gotten instant responses,” he said. Previously, he might have had to deal with more people and not immediately heard back….
For David Storper, who’s raising money for his 5P Capital Management, Zoom sessions have allowed him to get to know his potential investors better through their home libraries -- an insight he wouldn’t have gained in pre-virus days.
“Some were the usual titles that you might expect, others were probably staged,” he said. “A few piqued my interest and I’ve added them to my reading list. But the Jackie Collins book, that was a bit of a surprise.”
Hedge Fund Rookies Beg for Cash on Video With Kids in Background [Bloomberg]
Hedge Fund Wipeout in Canada Leaves Only Five Gainers in Quarter [Bloomberg]
Hedge Fund Star Who Won Big in Last Crisis Slumps to 26% Loss [Bloomberg]
Investors yanked $33 billion from hedge funds during first quarter [Thornton/N.Y. Post]
Big Investors Warn Hedge Funds on Tapping Small-Business Aid [Bloomberg]
Billionaire Chris Rokos Reopens Hedge Fund to Raise $1 Billion [Bloomberg]
A former Point72 portfolio manager just broke through the industry-wide chill on fund launches by kicking off a $250 million supply-chain focused hedge fund [BI]