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The Bloomberg Hedge Fund Summit just wrapped up a panel on hedge fund start-ups, and they made a few points that we had to share right away.
The panelists were Jason Ader, CEO and CIO of Ader Investment Management, Gregory Hall, Senior Managing Director from Blackstone Alternative Asset Management (BAAM) and Ted Seides, President and Co-CIO of Protégé Partners, LLC.
Their discussion centered around what it takes to start a hedge fund in these lean days. Here are the crucial takeaways:
- In terms of what you need to raise to start, at a minimum think along the lines of tens of millions.
- Forget the roadshow too. Back in the bad old days, hedge fund start-ups would make their case to say, Goldman, pass the hat, and get money from strangers. Now that's just not happening.
- It's not just about the money, though, potential investors want to see that you've been seeded by a respected company — a Blackstone or a Reservoir, for example.
- You need to be successful right away if you're going to seek more funding. You can't say, "once we get $500 million this fund will be awesome." You need to work with what you have and hit the ground running.
This is a really interesting topic, so expect more from us one this. For now, try finding a friend at Blackstone.
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