Established managers in the alternative funds space tend to have networks and processes in place when it comes to domicile selection, structuring options and professional support relationships.
However, for emerging, start-up or first-time managers, the pathway to success is perhaps not so clear.
While some emerging managers may well possess significant experience, particularly if they are spin-outs from larger houses, many are starting from scratch and are presented with some specific challenges when it comes to launching their operation and their first funds.
Access to investor capital, finite resources, time and costs are potential issues for all managers. However, these issues come into particularly sharp focus for emerging managers who are highly time- and cost-sensitive.
Getting off to a good start is fundamental not only to an initial launch, but to the ongoing success of a fund and subsequent fund launches.
And with more than 550 first-time funds collecting more than $46 billion in global capital last year (Preqin), it’s a significant segment of the market.
Which is why it’s so important for those supporting emerging managers – from domiciles like Jersey to service providers and legal advisers – to understand what their key concerns and challenges are.
In our experience, choosing a domicile is one of the pivotal decisions made by all alternative managers. Particularly as the world emerges from the pandemic and as political fragmentation persists, secure, safe and certain conduits for supporting targeted and efficient capital flows have become highly prized.
Having a reliable, robust platform on which to build a fund operation is key to supporting success in the longer term. Having that platform in place can help with navigating complex regulations such as AIFMD II; meeting reporting and substance requirements such as SFDR and BEPS; accessing investor capital; distributing across borders, such as EU pre-marketing rules; and, ultimately, generating target returns.
But whilst this might be business as usual for domiciles, for emerging managers, it can be a minefield to navigate.
That’s why Jersey Finance is delighted to have worked with Funds Europe on this survey, to get an insight first-hand into the key considerations of emerging managers and their decision-making processes.
It aims to analyse some of the key challenges they face – from cost sensitivity and the need to provide innovative, flexible solutions, to key areas of support they are looking for such as structuring, regulation and specialist expertise.
It also looks at the attitudes of emerging managers towards geographically diverse investor markets, both EU and non-EU, and how domiciles and service providers can support those ambitions, and the risk posed by investor caution when it comes to committing capital.
Emerging managers play a vital role in the alternative fund ecosystem, often working in specialist, niche and cutting-edge areas, and offering impressive return potential.
It is in all our interests to give them the support they need so that they can make the impact they want. Certainly Jersey intends to form part of the exciting European emerging manager story.
I hope you find this survey and report illuminating and helpful.
By Elliot Refson, head of funds, Jersey Finance
Read the full report
1. Introduction: Shedding light on the emerging manager experience
2. Emerging managers survey 2022
3. The biggest challenges
4. Finding the right solutions
5. Choosing the right domicile
6. Conclusion
© 2022 funds europe
