First-time fund raisers may not succeed in today’s bear market because some allocators are hesitant to place money into new funds. This all comes after years where allocators were keen on new managers and new investment ideas.
Inflation, rising interest rates, and high private market valuations worry allocators in the second half of 2022, influencing them to side with established fund managers.
Ahmad Ali, managing director at the Presbyterian Church Pension plan, recently said the following at he Context 365 conference in New York: “We’re putting the brakes on new concepts. We’ve got to put a lot more cash on the sidelines,” and that when it comes to new funds, “Someone we don’t know, it’s not something we’ll do right now.”
Private investment managers who raised their first funds in the last couple of years and are looking for a follow-up raise are also met with caution. “It’s not attractive to us,” Oliver Weinberg of CMT Portfolio Advisors said at the conference.
Weinberg, though, says there are opportunities in macro hedge funds, managed futures funds, long-short biotech strategies, distressed investments, relative value funds, healthcare royalties, and secondary funds.