AOI Capital's Overview of Capital Raising

Written by Joe MacLean. Follow me on Twitter.

Despite a generally difficult fund-raising environment for hedge funds, particularly those of small and emerging managers, investors continue to look for talented, skill-based managers.

Investors are particularly looking for highly liquid, trading-oriented strategies. They also favor strategies with an algorithmic engine. 

Here is more color about fund-raising from a previous post written by Michael Bigger.

What Have We Got—Is It Marketable?

Written by Michael Bigger. Follow me on Twitter.

Click For Larger ImageTwo components of our algorithm workflow ask “What have we got?” and “Is it marketable?” The algo’s performance answers the first question. How your strategy and your operation rank against your competition will answer the second.

 

 

The Aurum Report contains a gold mine of data on hedge funds' performance. Explore the stats for some of the top hedge funds and get a sense of how marketable your strategy is. While you're browsing, check out the return of my previous employer, D. E. Shaw, on page 74. That is Alpha! Unfortunately, Aurum removed this report from the internet recently. In a nutshell, as of July 2008, the DE Shaw Oculus International Fund had a compound annual return of 24.77% since inception with an annual standard deviation of 9% and a Sharpe ratio of 1.99.

 

 

If your strategy does not clear the bar, don’t give up. Iterate!