REMC’s consulting practice focuses solely on the launch, growth and/or long-term stability of undercapitalized and emerging hedge fund and private equity investment management firms. We provide bespoke services custom-tailored to the client’s strategy, investment space, current positioning and long-term goals. Areas of expertise include:
· Capital Raising: Target Allocator Sectors, Stand-alone/Joint Presentations
· Firm Raison d'Être: Firm-Wide Conformance
· Marketing Documents: "Layered" Presentations for Graduated Texture and Dialogue Continuance
· Structural & Staffing Considerations: Institutional Standards
· Portfolio Management: Investment Protocols Addressing Trigger Issues
· Administration: In-House versus 3rd Party
Allocators’ standards for acceptance of emerging managers have become severe over the past 15 years. Gone are the days of several meetings consisting of a PowerPoint presentation with verbal discussions of strategy, investment process and a few case studies leading to a commitment. Due diligence processes can extend for multiple quarters, with detailed dissection of staffing, backgrounds, investment protocols, risk management, back office procedures and references.
Heightened investor expectations and risk avoidance have negatively impacted the likelihood of success for smaller and emerging managers, eliminating them from consideration by over 95% of allocators. For undercapitalized and emerging managers alike, their size dooms them to chasing an excessive number of small bite-size allocators, forcing a disproportionate time allocation to marketing and straining back office capabilities.
Undercapitalized managers face size and organizational scale bias, resulting in a frustrating cycle of struggling to grow AUM and resolve these issues. Most emerging managers have limited experience and resources for capital raising, managing entire firms or overall portfolio management. For both, this exposes principals to significant challenges in achieving reasonable economics and corresponding growth pains, as a low fee base impacts personnel and structural buildout. The outcome is a reinforcement of investor biases and creating conflicts of interest for principals between raising capital to end this frustrating cycle and that by doing so the distraction may impact portfolio performance.
Most managers with disappointing AUM’s assign blame to lack of access to the right relationships within the investor space. This perception is largely inaccurate and fuels disappointing outcomes with marketers (both in-house and third party). Capital raisers’ relationships merely open the door for a look at a manager’s deck and perhaps a phone call – nothing more. If the message isn’t presented succinctly in a form that addresses investors’ priorities, even the very best of relationships will fall flat.
REMC practices a holistic view to its engagements. Firms with skilled managers that are struggling to achieve its full potential definitionally require refinement of their approach in one or more of our practice areas prior to an enhanced capital raising campaign. This is because there’s good reason why otherwise qualified managers fail to win their fair share of commitments, and that explanation invariably circles back to allocators’ expectations regarding the firm’s organizational characteristics and investor communications buttressing therewith.
We believe that successful firms understand their “raison d’être,” or identity, and practice this through their strategy, structure and marketing approach. REMC views all areas of a firm as interconnected to its identity, and its communications with investors always consistent with this message. In this regard, a synergistic whole best positions the manager for optimizing its potential for allocations.
Once functionality and messaging are in alignment, the process of accelerated capital raising can engage. REMC can assist in identifying appropriate target allocator spaces, specific investors within such spaces, provide introductions and participate in the marketing process. Mr. Rubin’s background as the founder and portfolio manager of a long-time successful firm uniquely positions him to assist in refining deficient fundamental matters. Critically, and unlike other capital raisers, he is highly qualified to present strategies at a “manager level” of competence and provide a meaningful imprimatur on behalf of clients.