The Hedge Connection team were otherwise occupied for the last week and have been neglecting our blog. A combination of July 4th holiday, preparation for our July 15, 2009 Investor Roundtable in San Francisco, vacation to the Pacific Northwest and the odd US National Soccer team victories….over Spain!
However, we’re back now and brimming with marketing advice and success stories from our hedge fund clients.
To get the ball rolling please find an excerpt from a recent Alternative Investment Consultant forum that I attended yesterday in Greenwich. It was a very informative event, bringing together consultants, managers, foundations, endowments and pension plan sponsors.
I will share some excerpts over the next few posts.
A consultant focused on smaller, emerging managers offered his replacement of the 3 P’s (Performance, Pedigree and Porfolio) to the 8 L’s.
The 8 L’s reflect a growing recognition among hedge fund investors that “Everyone has a great resume and a great strategy … and that there are many great managers, but very few great managers of portfolio managers.”
The 8 L’s
1. Losses – what are/were they and can you explain what happened.
2. Life Expectancy - how long is the fund expected to be around – how long is the arb or opportunity available?
3. Legal – are you subject to any litigation? what is your compliance infrastructure?
4. Leaving – are your staff sticking around or are there recent or expected departures?
5. Lessons – what lessons did you learn last year? or during recent volatility?
6. Learning – how are you educating your team and your managers? What tools are at their disposal? How are you investing in continual learning?
7. Lock-ups - what are they? Do they make sense? Can they be explained? Did you ever gate – if so why?
8. Leverage – explain view on leverage, how much is required for the strategy to deliver returns.