The ability to generate conclusions about hedge fund managers’ behaviour could be the tipping point for whether big investors double down in hard times or call for redemption.
Picking billion-dollar hedge funds is big business.
Especially now, with major investors like CalPERS needing to trim their billion-dollar lineups of Wall Street fund managers.
There is one startup out to change the pecking order on Wall Street that could dramatically change this process. AltX
has been creating in-depth profiles that investors like CalPERS could really use as it is forced to whittle down its massive list of hedge fund pros. Next, it will take its analytics to mutual funds.
AltX’s parent company IMatchative has raised about $US28 million to date, and from some boldface names. Billionaire Carlos Slim’s investment group Control Empresarial de Capitales backed the product last year.
He invested in IMatchative’s Series B round alongside backers like David Bonderman (one of the heads of private equity firm TPG Capital), Wells Fargo, and Value Act Capital founder Jeff Ubben. There are more than 20 investors behind IMatchative and AltX, many of them hedge fund professionals.
The company has only been operating live for a few months and has 20,000 people in its database, but IMatchative CEO Sam Hocking says this will grow to include 100,000 fund managers and other investors before the end of the year.
It creates proprietary behavioural profiles of top fund managers using everything from divorce records to political donations — but it doesn’t come cheap. For limited partners (like CalPERS, for example) it costs $US30,000 for a subscription. For hedge fund managers, it’s $US15,000. Hedge fund managers can also sign up for a free version of the product that doesn’t have all the info limited partners pay to receive.
Financial services firms have long sought to create a product that provides investors with insight into money managers’ mentality. But having a complete behavioural profile of portfolio managers may bring the CalPERSes of the world as well as smaller hedge fund backers peace of mind — and a better shot at dodging a black swan when hard times hit the market.