How one firm is helping emerging hedge funds launch with hundreds of millions and virtually no staff

"Driven by an influx of capital from the separately managed account boom - and by technology that used to be available only to the biggest investment firms - entrepreneurial portfolio managers are launching with just a couple of employees, or in some cases all by themselves, and outsourcing the rest."

"The pitch to managers, according to partner Semi Gogliormella, is straightforward: They can outsource much of the non-investment business - operations, compliance, vendor management, and institutional-grade systems - and focus their early days on investing and raising capital."

"Gogliormella, who has held senior operations and compliance roles at firms including WorldQuant and Boulder Hill, said a combination of SMA demand and improved technology has significantly shortened launch timelines. In some cases, he said, managers can be up and running with new SMA capital within weeks of signing an investment management agreement."

A new generation of hedge funds is launching with significantly smaller teams by leveraging separately managed account (SMA) capital and outsourcing non-investment functions. Portfolio managers are starting with just a few employees or solo, delegating operations, compliance, vendor management, and technology infrastructure to specialized service providers. IIP Services exemplifies this trend, offering managers a ready-to-use platform that handles back-office functions while allowing founders to focus on investing and capital raising. The combination of growing SMA demand and improved technology has dramatically shortened launch timelines, with some managers becoming operational within weeks of signing agreements. Service providers are competing aggressively to capture market share in this expanding ecosystem.

Read at Business Insider