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

If you are starting a hedge fund or currently running a hedge fund then this might be one of the most valuable videos that you watch this year. In the following video, I cover process documentation, why it is important, who should be doing it and I will give an example of how it can work.

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

Write down all of your high-level processes on a list.
Use a separate piece of paper or MS Word document to document the steps for each of the processes.
Analyze these steps and processes to see whether there are areas for improvement or unnecessary steps that should be removed to streamline your hedge fund business.
This will help you figure out whether your team and your resources are being used to their full potential.
“If you can’t document your system then you don’t know what you are doing.”

Transcript of Documenting Operational Hedge Fund Processes

Hello, this is Richard Wilson and right now we’re going to talk about process documentation, why it’s important, who should be doing it and just give a quick example of how it can work. And if you are starting a hedge fund or if you are running a hedge fund and you’re looking to improve its operations then this might be one of the most valuable videos that you watch this year.

Basically, process documentation allows you to see your business from a top-down view everything that’s it’s doing with more clarity probably than you ever have before. If you’re never done it this will provide a lot of value to your firm. The first thing you need to do is write down every important process that your firm undertakes, maybe you have an investment research process, maybe you have your general investment process, maybe you have a hiring process, how you hire more people to your team, it is an operational processes, some auditing processes, a compliance reporting process. Write down all of those major high-level processes. You should have at least 10 to 15 and probably not more than 30 and write down all those processes in a list.

Next, what you want to do is get a separate piece of paper for each process and you can use process documentation software if you’d like. You can use mind-mapping software if you’d like. But you can do these within Microsoft Word. It doesn’t take any special technology or software purchases to complete these tasks. If you open a Word document now, take those, say 20 business processes you have and document steps, 1 through 10 or 1 through 20 of what is done with each step of that process along the way.

Now, often times — I’ve done these for businesses that range from a million dollars of revenue or $500,000 of revenue to multibillion-dollar corporations and documenting these processes can be very challenging because lots of people operate in silos and sometimes even the CEO of a hedge fund or a company might not know how all the processes flow through the organization. So it’s very likely you’ll have to interview other people on your team or service providers to figure out exactly what all the steps are from soup to nuts, how things get done within your hedge fund.

What is important to do as an important process? So what you need to do is document all 20 or so of those business processes step-by-step so you can look at them and see if there’s any obvious areas of inefficiency improvement, maybe those steps, it can be taken out, maybe you’ve been meaning to improve your transparency if you’re a hedge fund or the institutional quality of it and some of these process if documented the right way can actually be shown to investors, to show them how you operate in a professional consistent manner.

It’s also important to have these in place so you can really analyze whether your team skills and abilities are actually being put to use in the best areas. I spoke with a hedge fund recently who documented all of their business processes and they ended up outsourcing 16 of the 18 business processes that they ran. They figured out that only two of them really pertain to their core competencies and their competitive advantage.

So integrate a story to show, if you’re starting a hedge fund or looking to improve your operational improvements this is something where you don’t need to go hire a consultant right now and spend $300 an hour paying them to document your processes, you should have your processes documented and this is somebody at a mid-level or a high-level within the organization can do. It does not take that much time to document them and it can give you some huge benefits that could lasts for a remainder that your firm or fund is in business.

So there’s one quote, I think it’s by Drucker that says “If you can’t document your system, you don’t know what you’re doing.” And then there’s another quote, I think it’s by Deming that says “If you can’t document what you’re doing, then you can’t improve it.” So it’s a great opportunity to both improve and make sure you know exactly what you’re doing and what you’re not doing by documenting all of your business processes and it’s something that I don’t see often done, so I think if you do this and you do it right and take away some lessons from it, it can be somewhat of a — you know one of those 10 things that gives your hedge fund a competitive advantage over others. So thank you for your time and we’ll see you again soon.

I recently spoke with a hedge fund manager who documented operational processes and ended up outsourcing 16 of the 18 processes that they ran. This shows how documenting operational hedge fund processes can help save your hedge fund money and make your fund more efficient.

Your friends here at https://investmentcertifications.com

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