5 Tips to Emailing Busy People (read:Investors)

July 14, 2008 | Leave a Comment

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I have had the pleasure of meeting Tim Ferriss, author of the NYT best seller The 4 Hour Work Week, on a number of occaisons.  Each time I came away impressed.  Not only is Tim an approachable, humble guy, but he has incredible focus and makes insightful observations about how people can be more effective in their work and life.

Hedge fund managers have much to learn from Tim.  Every start up hedge fund manager should read his book.  Will it tell you how to make tons of money on only 4 hours of work per week?  Probably not.  However, it will give some great ideas on managing your time — and business — more effectivley.

In this instance, are you being effective in how you are reaching out to investors?  Whether your leads are warm or cold, how are you contacting them?  Are you getting to the point?  Are you being respectful of their time in how you are wording your email pitch?

The following post on Tim’s blog illustrates this point:

 … I’ve been able to see some of the worst e-mail pitches out there. Here is an example of how to do it properly, with 5 tips and good template phrases bolded:

Hi Tim,

I hope all is well (and I gather from your celebrity that it is—I can’t seem to go a week without seeing your book or name somewhere).

I know you place tremendous value on your time so I’ll be brief. The website I launched last fall (www.SmartRaise.com) has evolved into a much more far-reaching venture: a software company that provides fundraising optimization and online advocacy solutions for nonprofits. I’m raising $500-750k for the business, called Donor Loyalty Corp, and have a meaningful percentage of that already committed from various Angel investors.

Naturally, I’m courting a number of prospective Angels from my personal network to hopefully fill out the rest of the round. However, I was curious if your experience has taught you any lessons about identifying seed-stage investors and, more specifically, if you’ve come to know any Princeton Alums or other individuals who have an appetite for deals like these. I’ve attached my fundraising deck for some context.

I understand if you’re too busy to answer in depth or would prefer not to discuss the topic given our limited interactions in the past. However, if the professor in you has any pearls of wisdom or specific thoughts, they would be greatly appreciated. Thanks in advance and I hope we can connect.Best,Robert J. Moore ‘06

###

Here are a few notes on this e-mail and what makes it more likely to get a response:

1. It’s short and what he’s requesting is clear. No “let’s jump on the phone for 10 minutes; it’ll be worth your time.”

2. He made an impression in our initial meeting, and he hasn’t irritated me with zero-content “keeping in touch” e-mails. He hasn’t worn out his inbox welcome.

3. He makes it clear that he’s doing his part and has explored other avenues before asking for my help. It’s amazing how many would-be mentees or beneficiaries ask busier people for answers Google could provide in 20 seconds. That puts you on the banned list. Explicitly state what you’ve done to get answers or help yourself.

4. He used the executive recruiter referral trick. Seldom will a headhunter call a gainfully employed CXO-level executive and ask them to take another position. They’ll instead ask the exec if they know anyone who might be interested in position X. The intention is clear (might you consider this job over your current employer?), but it gives the executive a comfortable decline option.

5. He makes it clear that it’s OK if I can’t help or if I’m too committed elsewhere. This — paradoxically — makes it much more likely he’ll get a response, which he did.

Hedge Fund Launch.com Sees Rocky Road for Start-Up Hedge Funds in Months Ahead

April 22, 2008 | 5 Comments

Chicago, IL (PRWEB) April 22, 2008 — Hedge Fund Launch.com sees a difficult environment for start up and emerging hedge funds over the next several months. Fall out from the U.S. credit crisis, losses from “blue chip” hedge funds and a slowing economy have caused many allocations to hedge funds to cease. Hedge Fund Launch.com offers some insights to hedge fund managers trying to raise capital in this environment.

Hedge Fund Launch.com Core News

Industry performance: Returns  have not been great so far in 2008 and many believe this may continue until the U.S. credit crisis and economic landscape improve. This is causing a lot of previously earmarked hedge fund allocations to remain on the sidelines.

Read More

Hedge Fund/PE Basketball Game; Entire Event Raises Over $700K for NYC Youth

April 20, 2008 | 2 Comments

This is good stuff and the kind of thing the mainstream press should note about the hedge fund industry: there is a lot of philanthropy and generosity!

 Last night, corporate sponsors, New York Knicks alumni and NYC high school basketball players came together for a night of basketball at the 2008 11th Annual Net Gain Tournament hosted by Youth, I.N.C. The tournament, which was held at the Park Avenue Armory in New York City, raised money for the organization Youth, I.N.C. Youth, I.N.C.’s Net Gain Program provides court time for high school basketball teams whose schools do not have gymnasiums and gives athletes the opportunity to participate in projects that help improve their communities. Over the past 11 years, the event has raised over $3 million and has provided basketball court time to more than 2,000 NYC high school students. More than $700,000 was raised for last night’s event.

The event kicked off with the second annual Hedge Fund vs. Private Equity All-Star game, featuring some of the most prominent names in the Hedge Fund and Private Equity community and coached by New York Knicks legends Allan Huston and Walt Clyde Frazier.  For the second year in a row, the Private Equity team beat the Hedge Fund team - final score was 32-24.

Additional tournament details and stats can be found directly below. Photos from the event can also be downloaded directly from: http://www.imagelinkphoto.com/youthinc.

2008 11th Annual Net Gain Tournament Stats:

Private Equity vs. Hedge Fund All-Star Game - For the second year in a row, Private Equity beats Hedge Fund 32-24!!

*    Private Equity team led by Ted Virtue, MidOcean Partners and coached by Allan Houston, New York Knicks alumni
-    Ted Virtue, MidOcean Partners (Captain)
-    Rob Berner, CVC Capital Partners
-    Ron Blaylock, GenNx360
-    Rick Schnall, Clayton, Dubilier & Rice
-    Jacob Capps, Lion Capital
-    Luke Long, Thomas H. Lee Capital
-    Rick Schifter, Texas Pacific Group
-    Michael Beal, Morgan Stanley

*  The Hedge Fund Team included:
-  Marc Lasry, Avenue Capital Group (Captain)
-  Ryan Renteria, Karsch Capital
-  Andrew Fishman, Schonfeld Group
-  Funsho Allu, AIG Investments
-  Steve Cronin, Schonfeld Group
-  Kyle Neptune    
-  Kevin Draughon

Half court shoot-out winner - Darius Garland from Jacqueline Kennedy Onassis High School

Round-robin tournament (24 teams playing on 6 courts throughout the night) final championship game:

*   Wachovia vs. Bloomberg & Crestview
*   WINNERS: Bloomberg & Crestview
*   Final score 26 - 22

New Family Office Association Launches

April 15, 2008 | 1 Comment

If you have your own family office or you work for one, I think you should take notice of this new association.  Not only is it very timely, I think their web site is very informative and well laid out.  In corresponding with the founder and CEO, Angelo Robles, he let me know that  The Family Office Association desires to engage exceptionally successful individuals and families towards their perfect vision, one that captures their heart and empowers them to take action on their family, business and philanthropic passions – secure in knowing that an elite advisory group constantly oversees and coordinates their affairs. The Family Office Association, compromised of select and exceptionally successful individuals, families, foundations, family offices, family firms and elite advisors – organizes exclusive world-class: events, speakers and resources.

They have a very nice page about alternative investments with accompanying resources.  It is worth checking out.

Most Investors Will Miss This Chance

April 2, 2008 | Leave a Comment

The Financial Times recently ran a story titled “‘Unbelievable’ chance for hedge funds” and opened with:

“Hedge funds and institutional investors are starting to launch distressed mortgage funds to take advantage of an “unbelievable” buying opportunity, but they say they are running into resistance from risk-averse prime brokers”.

From where I’m sitting, the prime brokers are only a fraction of the problem.  The real road block is underlying investors.  The investing world has once again thrown on the blinders and after selling all of their positions into an illiquid market will sit on cash until it is too late, or worse, they are chasing liquidity down another rabbit hole - commodities. The supposed “long-term” investor has once again shown their true colors at the first sign of trouble and continues to lend support to the “hot money” moniker so feared by all serious hedge fund managers. 

My advice to the managers: keep the lock ups coming; it’s the only way to effectively manage your business and keep the little leaguers from fowling up the works.

Hedge Funds to the Rescue … You Expected Differently?

April 2, 2008 | 1 Comment

It should come as no surprise that the likes of Blackrock and Highfields have stepped in to lend a hand to the stumbling sub-prime mortgage market. They’re hedge funds, that’s what they do.  Government and corporate interventions are slow and laden with bureaucratic red tape.  And when they try to move quickly, mistakes are made ($2 for Bear Stearns, sheesh!)  Even at the multi-billion dollar assets under management level, hedge funds remain nimble and poised to step into these types of situations.  Think about it, why do the best and the brightest leave their positions at the “blue chip” bulge bracket shops to start a hedge fund?  To leave behind the shackles and ignorance that put these large institutions into the predicament that they are currently in. 

Of course the press will jeer hedge funds for taking advantage of the situation.  But let’s be realistic, why are we investing in hedge funds to begin with?  TO MAKE MONEY.  And if we can help out the economy along the way, well, that’s sweet icing on the cake.  Not to get too far off topic, but this is why the regulation of hedge funds needs to remain at a minimum; to allow these folks to get it done when the chips are down. 

Three cheers for hedge funds.  Hip Hip Hooray!

Hedge Funds the Next Bubble?

March 25, 2008 | Leave a Comment

As the flight to liquidity continues it’s hard not to notice that macro and managed futures strategies, particularly those focused on natural resources, have been the beneficiaries of the asset flows (check out the hedge fund index numbers: macro has been on fire while all other strategies have been taking lumps).  There is massive momentum here, but do the fundamentals justify the valuations?  Although most of the securities underlying these strategies are liquid, they are still subject to significant declines if everyone heads for the exit at the same time.  We’ve seen it before and we’ll see it again: money can leave a strategy just as fast as it entered the strategy.  Furthermore, as we have seen in the past, many traders and fund managers are geniuses on the upside (see the tech bubble), but are susceptible to getting carried out in the midst of a sustained downturn in their asset class (see the bursting of the tech bubble).  Are your macro managers the inheritors of market beta now (i.e., luck), or can they effectively manage exposures and minimize risk during periods of downside volatility?  In any event, this still does not relieve you of your responsibility to diversify across sub strategies, asset classes, operational risks, and multiple market risk factors. 

We say: Diversification, Diversification, Diversification!

Remember when it was an Open Market System?

March 18, 2008 | Leave a Comment

I’m extremely curious; why was JP Morgan/Chase granted the sole privilege of purchasing Bear Stearns for $2 per share.  Seems like a lot of this went on behind closed doors and occurred in such a quick manner that other market participants didn’t have a chance in Hades to respond.  While I haven’t fully crunched the numbers, it appears that their prime brokerage business alone would be worth $236 million at a low multiple, let alone any of the other profitable divisions and residual assets.  I’m pretty sure there are a lot of pissed off hedge fund managers that would have liked to been in on the bidding here.  And let’s not overlook the shareholders that got royally screwed here. 

A tip for the Fed: let the chips fall where they may.  The only cure for the mess that we’re in is to teach all the players involved some fiscal responsibility.

Weekly Economic & Investment Recap: 2.29.08

March 3, 2008 | Leave a Comment

Attached/linked please find And That’s The Week That Was, the Brounes & Associates market/economic commentary for the week ended February 29, 2008. Unfortunately for investors looking to close out the month with only slight equity index losses, February had an extra day this year and the markets did not take too kindly to the ongoing negative developments.  After a decent start to the week that had investors (somewhat) optimistic about the month as a whole, the final two days saw a return of the “bears” who focused on the weaker economy, declining dollar, softer earnings, rising oil prices, and all else negative.  In fact, Friday was the second worst day for stocks in 2008.  While much of the earnings news and economic data had been expected (for the most part), little positive emerged to bring about any semblance of a rally.  Bernanke keeps saying the right things and investors expect more rate cuts to ease the economic challenges, though the dollar and oil reacted unfavorably to these implications.  Bring on March. Maybe a new month will welcome a new attitude. 

Coming up in the week ahead:  Construction Spending (Monday), ISM - Manufacturing (Monday), ISM - Services (Wednesday), Fed Beige Book (Wednesday), Unemployment Rate (Friday), Non-farm Payroll Additions (Friday)

Why In-House Hedge Funds Flop

February 7, 2008 | Leave a Comment

When you have been in, attached, associated with the hedge fund business as long as I have, the idea of an in-house hedge fund is an oxymoron.  Although I understand why established firms want to set up hedge funds internally, the idea never really sat well with me.  Why?

At its core, a hedge fund is a small business and an entrepreneural operation at heart.  It is a small business.  It is a business established by someone who believes in his own idea, his own abililty and his own experience.  A hedge fund manager is someone who wants to “take the risk” of setting up his own business to test his ideas, abilities and experience — all to make money.  But also, he is someone who wants to be autonomous … his own man, the owner of his own destiny.  Once the concept of a hedge fund is taken and moved under the umbrella of an established Wall Street firm, that special something, that ”secret sauce” and drive that makes a successful hedge fund manager, is lost.  I don’t care how many guarantees the umbrella firm puts into place, the autonomy — and the excitement — is lost.

When I saw the following post on Seeking Alpha, Few Firms Have Created Successful Internal Hedge Funds- I thought the writer did a nice job of elaborating on this topic.  In fact, he believes the issue is centered around compensation, autonomy, stability of investment capital, compounding of capital, branding and ego.  I agree.

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