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  1. 04.20.2018

    Seeders Embrace Capacity-Constrained Strategies

    Seeders Embrace Capacity-Constrained Strategies Opalesque – April 20, 2018 Active management has always had a problem with diminishing returns at scale. Now one seed funding platform is actually telling managers that ‘assets are the enemy’. Delegates at the recent Opalesque Connecticut Roundtable argue that it’s more important for emerging managers to focus on performance. “I […] read more

Stride

  • Emerging Opportunities

    Successful investment experience, benefits of entrepreneurship

The way capital is allocated to funds is inefficient: 89% of industry assets are managed by just 11% of hedge funds.¹

  • Differentiated managers encounter less competition and offer lower correlations.
  • Smaller / emerging firms have averaged +20% greater annual returns than larger firms.²

 

Stride focuses on emerging managers because they can be more agile and innovative than their larger, more bureaucratic competition. They can also enter more inefficient and less competitive markets since assets do not restrict the opportunities they pursue. For example:

  • Misunderstood and inefficient markets
  • Gaps in analyst training and fund mandates
  • Market dynamics that move prices for non-economic reasons
  • Structures or tools that create competitive advantages
  • Jump steps in research and understanding investor behavior
  • Evolving regulations
(1) Preqin (2014).
(2) Barrons (2015), “How Small Hedge Funds Outperform Bigger Rivals.”