(Harvest) As the manager of an emerging fund coming off a few good years, how do you answer this investor question: “I like your fund, and I want to allocate more capital, but can you handle it?” An emerging manager needs to quell the concerns of investors if they want to grow their asset base. Managing $100MM is very different than managing $4B.
Managers can pull three levers to handle asset growth:
Move up the market cap spectrum
Increase the number of positions
Let liquidity deteriorate
