Looking For Outperformance? Invest With An Emerging Manager!

An ill-advised, persistent and costly error among institutional investors and their consultants is their reliance on large brand name money management firms to look after their assets. We had the privilege of attending and speaking at the recent Emerging Manager 2009 conference, from where we return with some very persuasive statistics that show the outperformance of small money managers over the large mainstream firms.
But first an overview over the universe’s demographics. Emerging managers encompass a wide range of firms. Joanne Infantino of the CFA Institute gave a brief overview over the emerging manager demographic. Historically, the term has been applied to minority and women-owned money management firms with a high degree of employee ownership and have less than $1 bn in assets under management. In the Altura database, the current average AUM is $257 million and average number of employees is 10.3. As a group, they employ over 8,000. Total assets held by emerging managers are $200 bn, representing a mere 1.6% of tax-exempt institutional assets. Michael Moy of Pension Consulting Alliance quotes numbers from Pension & Investments whereby only 100 mega asset management firms control 86% of global institutional assets. The Deal Sleuth believes that such a concentration of market power among so few decision makers should alarm all investors who build asset allocation models under the assumption of efficient markets with atomistic participants. As an aside, attrition rates between established and emerging firms are similar for equity managers, but emerging manager attrition is higher for fixed income.

The article is on :
http://thedealsleuth.wordpress.com/2009/06/01/looking-for-outperformance-invest-with-an-emerging-manager/

ACG : Accelaration Capital Group study (seeding)

Seeder Demand : Acceleration Capital Group's bi annual insight into the world of hedge fund seeding. Quantitative research results and written analysis available for registered ACG members.

See below the link to this study :
http://www.acceleration-capital.com/news/