0:00

This what Ted's thinking,

0:02

what it takes to

0:04

raise capital, discusses a

0:06

few tips for small managers

0:09

to prepare to grow. No

0:11

one wants to invest in

0:14

a small manager. There, I

0:16

said it. But everyone wants

0:19

to invest in a great

0:21

small manager. So how does

0:23

the small manager try

0:25

to prove that they're

0:27

great? I'd like to share

0:29

some tips, most of which are

0:31

routinely violated by the community of

0:34

small managers. First, it's not

0:36

their fault. Having spent a decade

0:38

and a half investing in small

0:40

hedge funds, I can't tell you

0:42

how many times a manager complains

0:45

that the only reason they don't

0:47

have capital is because alligators don't

0:49

get it. That's completely backwards.

0:52

It's the managers who don't

0:54

understand the playing field. My

0:56

favorite recent example is a blog

0:59

written by a manager with less

1:01

than $5 million under management. He

1:03

attended Global Alts in Miami,

1:05

apparently didn't raise money from the

1:08

event, and decided to blame

1:10

the conference organizers for his

1:12

shortcomings. Any seasoned allocator will

1:14

conclude that this manager didn't

1:16

do his homework, isn't self-aware,

1:19

and will never grow a business

1:21

when he blames others for his

1:23

shortcomings. A friend of mine calls this

1:25

lesson, Don't be an idiot. I'm

1:27

trying to be gentler. Second, do

1:30

the work. In the first quarter

1:32

of this year, we received 82

1:34

inbound requests for managers to appear

1:37

on the podcast. That's one a

1:39

day. We have a process to vet

1:41

potential guests that includes filling

1:44

out a simple form, answering

1:46

a few questions, and

1:48

hopping on a call with our

1:50

team before we mostly turn them

1:52

away. It's quite like

1:54

screening managers for allocations.

1:57

Incredibly, of those 82

1:59

only... 20 filled out the form and

2:01

only four finished the questions. About

2:04

half of the requests came from

2:06

PR firms, which tells you the

2:08

managers are willing to spend money,

2:10

but they're not willing to do

2:12

the work. As it turned out,

2:14

we offered each of those four

2:16

a slot in our 12 annual

2:18

sponsored insights. Third, be lucky. Putting

2:20

your best foot forward is necessary,

2:22

but not sufficient. You'll need a

2:24

healthy dose of luck too. Howard

2:26

Marx advises young professionals that the

2:29

best way to build a successful

2:31

investment business is to have started

2:33

40 years ago. That's a tough

2:35

one to take to the bank.

2:37

Fourth, find advocates. The allocator's rule

2:39

of thumb is everyone wants to

2:41

be first to be the second

2:43

investor. The hard part of that

2:45

equation, of course, is you need

2:47

investors who allow you to leverage

2:49

their brand. What can a small

2:52

manager do to increase their chances

2:54

of growing? We put together a

2:56

sequence of programs where managers can

2:58

a small manager do to increase

3:00

their chances of growing? We put

3:02

together a sequence of programs where

3:04

managers can learn best practices. For

3:06

starters, a manager can gauge in

3:08

our new coaching program to help

3:10

perfect their story. Second, Those wanting

3:12

a deeper dive can attend our

3:14

course for investor relations and business

3:17

development professionals this December. And once

3:19

you're ready for the big time,

3:21

you can apply for our Small

3:23

and Emerging Manager Summit, although you'll

3:25

need an advocate and investor from

3:27

the institutional investment community to be

3:29

eligible. That solves the rule of

3:31

thumb. No matter how you cut

3:33

it, growing a small fund is

3:35

hard. The industry is facing headwinds

3:37

for small managers across public and

3:40

private markets alike. Not the lucky

3:42

tailwinds from the past. Like winning

3:44

in the game of tennis, you

3:46

need to cut enforced errors and

3:48

learn how to hit winners. We

3:50

hope we can be a...

3:52

small part of

3:54

your future success. Thanks for

3:56

for listening to

3:58

the show. If you

4:00

If you like

4:02

what you heard,

4:05

hop on our website

4:07

at .com where you can

4:09

access past shows, join our mailing

4:11

list, and sign up for premium

4:13

content. Have a good one

4:15

and see you next time. and see you next

4:17

time.