Hedge fund start-ups are on the rise again and they are on the lookout for investment brokers who will go the extra mile on their behalf. Although they cannot possibly generate the revenue that a multi-billion-dollar asset managing firm can, start-ups funds can be profitable nonetheless.
Investment brokers who are willing to provide their services to the smaller funds with sub $75 – 100 million in assets under management (AuM) give hedge fund start-ups the opportunity to cash in on multiple smaller clients. These firms can either broker one or two multi-million dollar entities, or they can opt for a number of smaller start-ups. The managers of these smaller start-ups are out there looking for new service providers, so a broker has the opportunity to provide a comprehensive service for a great return right now.
Why are the young start-ups interested?
New and up-coming hedge fund start-ups find themselves in the peculiar position where they are in search of brokers, but their business can seem unappealing when compared to the bigger asset management firms. There are even well-established managers who have been disregarded by major brokers of late and are therefore seeking to replace the back and middle office services that used to be provided to them by big investment banking firms.