Low AUM after 15 years - red flag?
Interviewing at a $150M AUM HF - been around ~15 years with annual returns of 21% according to the investor book they sent me. Started with $5M or some crazy low number and scaled to here. Given the consistent decent returns is it a red flag that they haven't raised more capital? They say they're looking to scale to ~400M in the next couple years but why haven't they already done so?
Curious to hear any perspectives on this. My gut feeling is also that even though they have a lot of potentnial growth, they've been around too long to consider this a ground floor activity. Can't imagine the founders / senior people are going to want to share meaningful upside when they've been grinding away for so long.
Total investment team of 5 people.
If their book is full of $100 million-ish market cap names, probably not a scalable strategy.
Nope - top 3 holdings are 15B, 14B and 2B market cap
Ok, then some other reason.
They might just have a good thing going and not care about the incremental money that comes with scale. Nothing wrong with it, just not a growth opportunity for you
Could be personal money contributed by the founders. Maybe they don't want to take outside capital.
What did they say when you asked them?
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