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Alt investment managers called to task for managerial and structural shortcomings that handicap asset growth

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A great number of the world's more than 13,000 alternative investment funds suffer from "Fund Manager's Disease," which significantly prevents those funds from increasing assets under management (AUM).

That’s according to Ole Rollag, managing principal of Murano Systems who, in his keynote presentation at the Amsterdam Investor Forum hosted by ABN Amro Bank, said that and on an industry-wide basis, the ‘disease’ serves to limit the adoption of alternative asset classes by institutional investors.
At a by-invitation-only session for global fund managers held at ABN AMRO Bank's headquarters in The Netherlands, Rollag noted that: "Because a fund's Chief Investment Officer (CIO) typically serves as that organisation's CEO or managing partner, many funds are ill-equipped to organise or manage operational functions that are as important, or even more important to investors, than investment performance. Most CIOs are trained and hard-wired to focus on their fund's track record, but very few have the managerial skills or the time to run a successful organisation."
In addition to the inability of fund managers to address all of the strategic, tactical and cultural demands necessary to build a successful firm – which he calls "Fund Manager's Disease" – Rollag noted that: "AUM growth at many funds is handicapped by legal structures, liquidity restrictions and a lack of marketing sophistication that precludes them from consideration by institutional investors and allocators."
The broader implication of these managerial shortcomings across such a great number of funds, according to Rollag, is that the alternative investment industry is greatly limiting its own growth potential. He said: "Fund Manager's Disease at the fund level can be cured by hiring and empowering business professionals whose credentials are based on function-specific success; not simply on having worked for another fund. Industry-wide, the disease can be eradicated only when it's considered standard practice for alternative funds to apply the same level of strategic thinking and operational rigour to enterprise success that they devote to managing their fund."

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