Many hedge funds run into problems in the day-to-day operations of the fund but struggle to solve these problems quickly and effectively. In the following video, I explain a couple strategies for solving some of the problems that may be holding your hedge fund back.

Video Transcript/Summary: The strategies and tips provided within this video module include:

Forget about contacting new investors. This may seem counter-intuitive but many managers look past the problems at their hedge fund and just put more efforts into trying to contact new investors.
Use the four why tool for solving your hedge fund problems.
Just one under-performing area of your hedge fund business could be holding back the performance of the entire hedge fund.
So it’s important to figure out what the bottleneck is that is causing your hedge fund problems and eliminate it.

Transcript for Hedge Fund Problems

Hello, this is Richard Wilson and today we’re going to talk about something you can do to break past maybe a bottleneck that’s holding your hedge fund back. Basically, a while ago I wrote an article, the title was Forget about Contacting New Investors. And the reason I wrote that is that lots of people come to us looking to purchase investor databases or getting new strategies in capital raising and often times they already know the answer to what they need to do but they haven’t asked themselves any questions to figure out what that answer is. And it may seem illogical to forget about contacting new investors but if that’s not the bottleneck holding you back, if investors is not the thing slowing you down, you may want to figure out what the thing is that’s slowing you down and remove that roadblocks so then you can move forward faster and be more efficient with everything else that you’re doing.

For example, I use one system called the four why process and basically what you want to do is ask yourself questions related to your problem for a very specific continual questions until you find the answer. And usually one question is not enough, usually you have to ask it 3, 4, 5 times. But it’s called the four why tool. The first question could be, “Why don’t we manage a $100M in assets?” And the potential answer could be, “We’re not raising capital from wealth management firms like we had planned to.” And a next question might be why, “Why haven’t we done that?” The potential answer could be “That are marketing materials have not been brought up to par with competitors and they’re too light. And our investment process is poorly described.”

So you might ask yourself again, “Why is that?” And the answer could be, “We know that we should be paying a consultant or an in-house marketer to help with both marketing materials and generating relationships but we have not hired one.” “Why is that?” And the final answer could be something about “We do not have the profits available to hire a full-time marketer but we should get around and create a new system to share equity, grow relationships with third-party marketers or build a marketing related advisory board.”

So after 4 questions you get down to some pretty granular answers that point to possible solutions like a marketing related advisory board, growing relationships with a third-party marketer. You know sharing equity, to hire someone in-house and start training them. So that kind of breaks it down and what happens is you could get that answer from why don’t we manage $100M in assets but it’s not a direct link to when you break it down the more times you ask why, why, why, why? Then the answer presents itself as stated within the question that the answer becomes included within your question.

So that’s one tool that businesses have used to grow their business in every industry and you could have 20 factors which determine the growth of your hedge fund and just one of those 20 not performing well or not being as high quality as it should be can hold back your whole fund despite the performance of the other 19. So sometimes these types of questions can help zero in on that one thing that’s holding you back which you might not be able to see because you’re so close to the problem on a day to day basis. And that this is something that I think clients could use more often and I’ve used it within my own business and that it really does help zero in on the things that are holding you back.

So I hope this tool helps. It’s called the four why tool. And thanks, we’ll see you again soon.

I hope that this video has provided you with a couple strategies for figuring out what is holding back your hedge fund.

Your friends here at https://investmentcertifications.com

Many emerging managers and hedge fund startups mistakenly believe that just because they have a great strategy investors will eventually flock to their hedge fund. Hedge fund investors like to see that you have a strong hedge fund business model and that you are of institutional quality. In the following video, I provide some tips and strategies for getting your hedge fund ocean-ready.

Video Transcript/Summary: The strategies and tips provided within this video module include:

If you go out to meet investors too quickly, you could do a lot of damage to your hedge fund.
Some funds are too eager to raise capital and present their fund at a point when the fund is not yet at 100% and you risk losing that investor forever.
You want to have all your marketing materials and your investment strategy prepared and well-polished.
It’s ideal to have a lot of investors and consultants that will give you some advice early on in your fund’s lifetime and many managers try to launch so fast that they have not developed these relationships.

Transcript for Ocean-Ready Hedge Fund Business Model

Hello, this is Richard Wilson and today I’m going to talk to you from here in Nice, France about making your hedge fund business seaworthy or ocean-ready. Well, I’ve been learning more about sailing in these past few years while raising capital and working in a hedge fund industry. And I think one truth about a hedge fund industry is that if you launch your hedge too quickly and you go out and meet with investors too quickly and too many different types of investors too quickly, you’re going to get recorded in different institutional databases as being unprofessional, as not having a clear investment process. You’re going to do a lot of damage.

I even spoke with somebody at the game 2011 conference last week about this. And they said that they only represent and they only raise capital for fund managers within in their first 6 months of launching their fund, because otherwise they’ve probably already done so much damage for themselves in the industry, that’s a waste of their time but you can work with them. I think that’s a little bit extreme but I think the advice goes along with what I’m trying to tell you right now is that when you’re sailing in a bay as many sailboats do here around Nice, you can have some things that aren’t totally working well in your boat.

Your rigs cannot be set up right, your ropes could be loose, maybe a couple of your sails are in bad shape, maybe the things on the walls of your sailboat inside the boat aren’t really secured. But if you go out in the ocean you really need to be kind of sea-ready or ocean-ready or seaworthy. In other words, if you get in a storm or if you go over a bunch of swells you don’t want things flying around inside the cabin of your boat. If you need to have your main sail work because your engine dies, you really need that main sail to work. You can’t really rely upon, you got a coast guard in the bay that he’d come, tow you over 50 feet to your dock. It’s much more serious when you’re out in the ocean.

So it’s really a great analogy for running, starting and growing your hedge fund because before you go out and meet with very important investors, you don’t or you have a great relationship with, you really want to have everything walked down and in place. You want to have your marketing materials, kind of in grade A shape, institutional quality, everything that you’ve shown an investor you want to have looked at 5 times by people in your team, do the fifth draft, have it compliance approved. If somebody is going to ask you for a standard DDQ or a question that comes in a standard DDQ you should be able to answer within one business day, not a week or two.

Everything you do in your business should be well-polished by the time you’re meeting with new investors. Hopefully when you launch your fund you’re able to balance ideas off of consultants, advisors, service providers and some investors you already have good relationships with, then that’s how you get the important feedback and really figure out what’s your checklist, what’s those 20 or 30 things that you are kind of seaworthy before you go out and start meeting with investors face-to-face about your fund.

And this is something that I think is a common mistake to make. People want to get out there and raise capital really quickly, you know speed an implementation, just get out there and meet with investors and get great feedback, but really you need to be very cognizant of the fact that if you do that too early and too fast, you’re really going to hurt yourself and you could sink your boat very on in the process, whereas if you just take that first valuable piece of the feedback from your investors, really use it, implement it, and evolve your fund at higher levels before taking it out to 300 different investors, you’re going to be much better off in the long run.

So I hope you enjoyed this video. It’s Richard Wilson coming to you from Nice, France and we’ll see you again soon.

Before you go out and try to meet with investors to present your fund it is important that you have your hedge fund business model well-established and storm-tested so that it can stand up to inspections by hedge fund investors.

Your friends here at https://investmentcertifications.com

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Hedge Fund Problems

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