10 ways for emerging hedge fund managers to flourish in 2012

A recent article on emerging hedge funds published in finalternatives, written by Diane Harrison of Panegyric Marketing, shed some light on what 2012 holds for emerging hedge fund managers. Essentially the future is bright for smaller hedge funds, and the following 10 tips can make the most of the favourable environment:

1 – Money will be moving out of traditional asset classes and looking for a place to go

2 – There is an actual mandate for professional investors to identify and partner with small managers

3 – Advisors and consultants will focus renewed interest on finding the next talent pool in alternatives in 2012

4 – Family offices are getting more serious about diversifying their investment allocations

5 – There is no clear strategy or approach that trumps all others

6 – The competition is fierce

7 – The due diligence process is not going away—embracing it early on can work to make you a stronger candidate for investment

8 – The educational forum for alternatives is becoming more populated and competitive, hence more widely followed

9 – Small managers who promote their ability to leverage nimbleness in 2012’s less-covered markets will attract investors looking for new ways to achieve alpha

10 – Strategic outsource partnerships are growing to bolster the strapped internal resources of smaller managers

This list doesn’t mean every emerging manager will automatically succeed – far from it, the due diligence process and investor requirements are greater than ever – but with the right approach and with the appropriate planning, prepared managers can make the most out of today’s investment climate.