A large percentage of hedge funds – especially smaller hedge funds – are highly motivated to raise capital. Meanwhile, for many of them raising capital is becoming increasingly difficult. While a percentage of institutional investors are pulling back, family offices and other high-net-worth individuals are often staying with hedge funds, if not directing more monies to them. With the wealthy motivated to consider hedge fund investments, a critical consideration for the funds is how to access them.
Generally speaking, it’s important to recognize that family offices and individual wealthy investors often connect with hedge funds in different manners. Focusing on individual wealthy investors, an underused approach to raising assets is by creating alliances with high-end financial advisors and wealth managers. Investors can connect with high-end financial advisors in a number of ways. For example, by going on an alternative investment platform that has a substantial number of financial advisors also involved is a possibility. However, this approach can fail to deliver significant new capital unless the platform or the hedge fund is also delivering meaningful support services to the financial advisors.
Justin Urbas Blog 