Finalternatives – “Smaller managers are better managers,” said Samuel “Q” Belk of Cambridge Associates, the investment consultancy advising on institutional assets worth about $3 trillion.
Speaking on a consultants panel during the recent FINforums Annual Hedge Fund Summit in New York, Belk said all consultants faced the concern that mega funds were merely asset gathering and that ‘multi-strategy’ was simply another way of saying ‘style drift’ while smaller managers were “in that sweet spot…giving you their best returns in the first two or three years.”
Cambridge, he said, is “always on the hunt for smaller managers,” a view echoed by his co-panelist Neil Sheth, director of hedge fund research at NEPC:
“Of the funds that we recommend,” said Sheth, whose firm advises on about $700 billion ($60 billion in hedge funds and private equity), “40% of them are under $1 billion…and some of them, we start.”
