Agecroft Partners specialises in consulting and third-party marketing for hedge funds. Its objective is to raise assets globally for institutional quality hedge fund managers by utilising a consultative approach within the institutional investor community.
The firm was founded by Don Steinbrugge (pictured), who has 26 years of experience in the institutional investment management industry. The five senior professionals at the firm pride themselves on having strong investment and industry knowledge, giving them significant credibility with large institutional investors. The partners average over 16 years of industry experience, and four of the five partners have previously worked for multi-billion-dollar alternative investment firms.
Agecroft is highly selective of the firms it represents. As a result it utilises an institutional-quality due diligence process in manager selection. This begins by leveraging its industry-leading reputation to attract high-calibre managers requiring marketing support. The firm’s approach to selecting managers from a universe of thousands involves a four-stage process, namely direct contact from hedge fund managers; hedge fund referrals from institutional hedge fund investors and service providers; industry research; and screening hedge fund databases.
The principal aim of Agecroft, following the screening process, is to raise assets for its managers, either on a global basis or with coverage tailored to enhance a hedge fund’s existing marketing strategy, focusing on a particular geographic region or investor market segment. The senior partners typically are in touch with more than 1,000 investors a month and hold direct meetings with between 50 and 100.
The fact that its screening process is so rigorous has helped foster Agecroft’s reputation and enabled it to stand out from the competition, and also enhances the credibility of the managers it represents – investors know that only very high-quality funds are represented. “Our research process involves screening 2,000 managers each year,” Steinbrugge says. “Usually we add about two new managers a year, and we are currently actively looking to replace one of our managers who recently reached capacity.”
Typically, Agecroft represents large, well-established hedge funds with strong track records and investment teams, although they will represent a few emerging managers. Says Steinbrugge: “Currently we represent six hedge funds with an average size of USD2bn in assets under management, one is located in Hong Kong, two in London and three in the US. All of the strategies are complementary.”
Each client receives tailor-made marketing to help its business grow effectively. “We try to be more than just your typical hedge fund sales organisation,” Steinbrugge says. “With our managers we’re continuously providing feedback to portfolio managers following any meetings with potential investors and identifying follow-up plans for each prospect. For investors we use a consultative approach where we not only keep them updated on the managers we represent, but also share our industry knowledge to help them manage their portfolios more effectively.”
Steinbrugge says that most net inflows into alternatives over the last two years have come from large pension funds. “We expect them to continue to be large investors,” he says. “However, we also expect endowments, large family offices and funds of funds to significantly increase their allocations in 2011 as well. This should benefit small and mid-sized hedge funds.”
Of winning the award, Steinbrugge says: “We’re always focused on making sure we have a very strong brand. Obviously we’re very honoured to have won this award and what we’re most proud of is that many of your readers are based in Europe.”