If Your Investment Strategy Is Good Enough, We’re Deploying Capital [First-Mover Advantage]
We Have a Limited Time Window to Identify, Vet, and Allocate to Experienced Asset Managers with the Ability to Generate Highly Competitive Risk-Adjusted Performance
As discussed previously, we have generated substantial institutional capital commitments that require us to greatly and quickly increase our current capacity. We are actively exploring opportunities to deploy that capital into deserving asset managers.
One prong of that effort is reaching out to our asset manager following here. If you meet the following criteria, I want to speak with you personally:
Manage an investment firm that allocates within any asset class (e.g., hedge fund, private equity, private credit, real estate, commodities, currencies, etc.) with a strategy that can generate highly competitive risk-adjusted performance,
Can deploy more than $100 million,
Have tapped out friends & family and are actively working to raise capital,
Have enough experience to know that regardless of what you do there is no RIA, family office, or other financial institution out there who is going to give you the amount of capital you need or marketing firm that will raise it for you (although there are plenty who will lead you on ad infinitum and/or take your money claiming they’ll try).
Beyond friends & family, it’s almost impossible to raise institutional-levels of capital.
We see firsthand how the biggest institutions have molded the entire investment industry to serve their interests on their terms to the point they will—on occasion—even openly state that they use their stacked deck to bet against their clients en masse.
We’re not in that club and wouldn’t take advantage of that luxury even if we had it...
As asset-class-agnostic quants running a smaller firm—by Blackstone standards—and driving academic progress in the field, we are able to fill the tremendous holes in the capital markets created by the hubris and position of the biggest institutions (i.e., trillion dollar AUM) by applying their level of expertise to the design of merit-based solutions: on the buy side, we capitalize deserving asset managers; and on the sell side, we engineer objectively better investments.
The capital commitments we received this year within the institutional space have pushed us to deploy several billion additional dollars with the same performance expectations they’ve seen from our current asset managers (which are very high). If your strategy is good enough, we’ll provide you as much capital as you can deploy without exceeding its capacity or diluting it.
After following us for as long as you have, we trust you understand how to measure your risk-adjusted performance; we just need to verify it…
I know it’s the holiday season, but time is of the essence. We will not expose our allocators to diluted performance via cash drag or otherwise, and we are making every effort as to not delay accepting the capital.
Further, while we do have substantial capital to deploy, the amount is not infinite, so there is a first-mover advantage. My calendar will be blocked for only a couple days over the coming weeks, so if you believe your firm fits the bill, please schedule your call as soon as you reasonably can.
There is an expectation within the industry that if your AUM does not exceed $1 billion, then you’re not a serious asset manager. That is simply not true. Those types of heuristics are established by the oldest, biggest financial institutions for the single purpose of stifling competition.
Anyone who has “passed” on your offering because of your AUM is simply parroting a cultural expectation with the sole focus of staying in the good graces of their overlords without applying any independent critical thought.
As a matter of fact, every academic study on the relationship between AUM and performance clearly illustrates an inverse relationship. We thoroughly understand risk, and won’t penalize your firm for being small.
The regulatory environment has evolved under the same motivations. Securities law is arguably negligently vague. This is not by accident. Sure, it provides some protections to investors sometimes, but more so, it provides traditional firms and conforming issuers a highly expensive mysterious gauntlet preventing competition and booby trapping neophytes who try.
The nature of our firm has driven us to be heavily vested in understanding and effectively navigating even the most esoteric securities law. One initiative within our Institute for Quantitative Asset Management is to drive regulators to provide greater clarity, delineate cultural expectation from law, remove misguided rules and regulations, and ultimately simplify the codes with the intent of achieving the SEC's stated mission, which is “to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation”.
The biggest firms easily raise capital despite mediocre, if not poor performance because they have tremendous AUM and wear the right clothes to the party in the form of regulatory compliance with operational and structural conformity. If that’s not you, we’ll solve each of those problems as need be (and not necessarily by conforming).
Again, all you have to do is demonstrate the ability to generate competitive performance, and you qualify to have us provide your strategy an effectively blank check without forcing you to compromise your fee structure.
Schedule your call with me before the new year. I look forward to speaking with you.