How Emerging Managers And Retirement Funds Can Work Together

Posted on: 28 October 2022

Emerging managers searching for capital and customers should take a look at retirement systems and the investments they're interested in. A number of retirement systems (such as for states and universities) have created programs to attract emerging managers and work with them to build both the manager's company and the retirement system's investment returns. This is a solid pairing that can help an emerging manager succeed.

Emerging Managers Can Handle Smaller Investments That Retirement Systems Want to Investigate

Retirement systems need a variety of investments to provide a steady income for their retirees and employees investing in the system. Some of these investment funds may be much smaller than the retirement system's usual managers would look at, but an emerging manager may be interested in handling the fund. Not only do these managers typically look at smaller investments, but they can also manage them to the point that they become significant players in the retirement system's portfolio. This is a good way for both the retirement system and emerging managers to expand their respective interests.

Those Smaller Funds Can Shore Up Retirement System Funds

And that transformation is important as no investment is guaranteed. Larger investments can incur sudden problems, as past recessions have shown. Having smaller, well-performing, well-managed investments scattered among the larger ones provides a lot more stability. Emerging managers want to succeed, and they will do their best to make those investments succeed as well, creating more support for the retirement system's funds in return.

Retirement Systems Can Give Emerging Managers More Visibility

Emerging managers generally don't want to stay emerging—they want to grow. Managing smaller funds and investments for retirement systems builds up the fund's portfolio of experience as well as its reputation if the investments are handled well. Emerging managers shouldn't view a retirement system as one that already has what it needs; in fact, some retirement systems are fully aware of the benefits of working together and are purposefully creating programs for emerging managers. Requirements vary but are worth taking a look at if your emerging manager company is seeking capital.

Emerging managers seeking capital need to take a closer look at retirement systems, especially those creating programs specifically for emerging managers. The systems in question may be state retirement systems, university systems, or even some private systems. This is a beneficial relationship that leads to growth for both if properly handled. 

Look for services that offer capital-raising for emerging managers to learn more.