Advent Software has released the results of a survey on how investors select hedge funds titled, “Pitch Perfect, How Investors Choose Funds.”
The survey was designed to determine not only what investors look for when making new hedge fund investments, but also the potential stumbling blocks fund managers should take pains to avoid when making their pitch.
The overall findings from Advent’s investor survey determined that, in a competitive market, hedge funds are in need of a compelling, strategic edge to help acquire and retain clients.
Seventy-five per cent of investors surveyed said they wanted to see research management systems in place at funds they are considering. As they are continually overwhelmed with an unprecedented volume of market data and their time is stretched increasingly thin, investors are seeking a solution to help better organise, manage, and leverage information – and an effective research management system could meet this need. Among other revelations, the survey demonstrated the critical role a research management solution can play in ultimately determining the success or failure of a firm.
“Investors now place a much greater value on a research management solution when evaluating funds as an indicator of institutional-grade operations,” says Chris Momsen, executive vice president, sales and solutions management at Advent. “Today, the bar has been raised and the ability to share business-critical information firm-wide and access the information they need easily, when and where they need it, is essential for firms looking to organize and leverage their intellectual capital.”
The survey also includes the following findings:
The top three most important characteristics when evaluating a fund (outside of alpha generation)
The most common mistakes made by funds when pitching to prospective investors
The importance of operational quality in the investor evaluation process
Advent says its Tamale RMS has seen significant growth geographically as well as by type of firm and number of users –including hedge funds, asset managers, fund of funds, pensions, and family offices. There has also been an increase in start-up funds adopting Tamale at launch stage, accounting for almost half of all new Tamale hedge fund clients in the past 12 months. This may be due to the need for a solution to help firms demonstrate their capabilities to investors in a demanding marketplace.
"For investment firms, there's tremendous value in having access to a research management solution as it helps firms differentiate themselves, reduces information overload, and helps us to deliver intelligent, value-added decisions that can benefit clients," says Lori Hoch, principal and chief operating officer at Cortina Asset Management. “We've seen quantifiable results firm-wide with Advent’s Tamale RMS and have been able to improve overall operations and enhance our reporting abilities, freeing time for our professionals to focus on what they do best: raising capital, achieving superior performance, and serving our clients."