Thursday, June 21, 2012

"Emerging Managers Have Delivered Twice the Returns of Established Managers"


Large funds, as proxied by the Top 100 Funds by AUM, underperform Emerging Managers by 200 – 400bp p.a. Despite these findings, by myself and others, The latest asset flows data from HFR indicates that only the larger funds are attracting new AUM.
Based on the historic data it seems that Institutional investors are prepared to forgo returns that are at least 20 – 40% higher (100 – 200bp p.a.) from Emerging Managers in exchange for the assumed peace of mind and reduced business risk that larger funds provide.

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