Decisions, decisions, decisions . . .

First, the backstory or none of what follows about these “decisions” will make sense.? If you’re a veteran of the Roundtable Forum, please scroll down to “What are the ingredients in the cake I'm serving on December 6th in NYC?”

In May of 1999, I threw some spaghetti against the wall and it stuck – for 23 years!? Of course, I’m referring to the Roundtable Forum.? Having spent a fair amount of time on the “hedge fund” conference circuit in the mid 90’s, I knew that it was becoming increasingly difficult to squeeze ROI out of these affairs - for me, to meet bonafide allocators.? So, I decided to invite a ballroom full of my closest contacts in the biz to an exclusive event in New York.? The ONLY people invited were qualified allocators and the alts managers who were speaking.? Effectively, I stripped away the noise associated with a large conference and focused on what I jokingly refer to as “the top of the food chain”: the relationship between the allocator and the manager.? After all, if it wasn’t for that, the need for a universe of service providers, including myself, wouldn’t exist.

Reading this in 2022, you might think, “Duh, she’s talking about cap intro”.? Back in 1999, the concept of capital introduction was in its infancy.? It began with the major prime brokers and eventually, everyone got on board.? I was an early adopter, but I tweaked the prime broker model to be less marketing oriented and more “academic” or educational.? After all, I’m not self-serving in the sense that I have no ongoing business relationship with the manager speakers. ?I don’t participate in their future revs.? So, I wanted the Forum to be an informative and value-added event by investors for investors (investor-driven).

Inclusive, “academic” decision making and programing – a truly curated approach.

I’ve organized 80 Forums in the U.S. and abroad.? I’m currently in the planning phase for our first Forum in New York City since COVID.? As I talk with potential participants on the buy and sell side, I’m often asked about the schedule of managers and how I select them – what the parameters are.? After all, I’m not an allocator, what do I know?? People are usually surprised when I laugh and say there aren’t any parameters.? Think equity, diversity and inclusion. I look at anything and everything managed by anyone in order to curate a compelling and timely program. So how do I make decisions?

Well, it’s art and science combined with a whole lot of organization.? Let’s use a New York Forum as an example.? I get started by inviting allocators to the event.? Having done this for more than 2 decades, there’s lots of trust involved.? People register based on our past performance (familiar concept, eh?) without seeing a schedule of speakers.? On their RSVP form, they have the option of telling us what strategies, themes, etc. are top-of-mind.? This is beyond valuable.

On the flip side, I contact all the managers, marketers and vendors we’ve worked, with plus a list of prospects.? I announce that I'm taking indications of interest to speak.? From this point on, each piece of information we collect becomes a potential ingredient in a successful Forum.? So, it’s kind-of like picking the right ingredients to bake a cake that will appeal to the taste of most allocators in the current environment.

What are the ingredients in the “cake” I'm serving on December 6th in NYC?

Before I begin the selection process, I look at where we are today (markets, economy, etc.). Then I look in the rear-view mirror. This reflection on the history and evolution of the alts industry is very helpful. In this case, I looked back and noted 2 important things:

1. By and large, "outsized returns" for which allocators happily paid 2-and-20, are a thing of the past. By definition, "hedge funds" are supposed to protect capital in down markets and perform or outperform in up markets. In recent years, the market has actually outperformed many funds.
2. This underperformance has led to disillusionment, movement away from "hedge funds" and downward pressure on all fees. It has also opened the door for strategies that no one ever dreamed of when we launched in 1999.

Conclusion/Hypothesis: Because the market is currently down on the year and volatile, I think that fund managers have an opportunity to outperform for the first time in a long time. Whenever markets become volatile, investors look to uncorrelated strategies and hard assets or "tangibles".

What I'm hearing from allocators confirms my hypothesis. They want to see CTA's (known for outperformance in down markets), credit strategies including distressed, litigation funds, macro, FX, crypto. As a general comment, they want to see uncorrelated funds/strategies. A certain number are open to meeting "emerging" managers.

I'll be keeping all of this in mind as I begin to select speakers for the NYC Forum. Given the great pool of funds I have to choose from, it's shaping up to be a very, dare I say "cool" and exciting line-up.

Stay tuned for the schedule! It will be out in early November. As always, feel free to reach out with questions and comments at [email protected] or call 212-717-9760.