Emerging Manager Roundtable
March 17, 2015
By Elana Margulies
Protégé Partners’ Chief Investment Strategist and Industry Veteran Michael Weinberg Discusses the Firm’s Belief in Emerging Managers
Industry veteran Michael Weinberg, Chief Investment Strategist at Protégé Partners, a New York-based $2 billion asset management firm which focuses exclusively on investing in smaller funds, emerging managers and seeding, argued emerging managers often generate higher returns than established ones because they are often better able to capitalize on inefficiencies in smaller securities and strategies than their larger peers. At EisnerAmper’s Emerging Manager Roundtable which took place March 16 and attracted approximately two dozen up-and-coming hedge funds, Weinberg discussed why the firm is bullish on this group of investment managers.
“If you look at the universe, by our statistics, there are about 7,500 small funds and we are defining them as funds with assets less than $1 billion and I assume most of you in this room have substantially less assets than that,” he said. “The 400 largest funds have 87% of the assets in the industry so there is this complete disparity where the vast majority by number have the vast minority of the assets and our view is large allocators, for example, the endowments, foundations and pensions, both public and private, they are insufficiently resourced to go through the 7500 managers like yourselves, so that is our value proposition. We have a globally-focused research team and we go through the 7500. They don’t need us to find the top 400.”
Weinberg specified that Protégé, which does seeding and arms-length investments, is currently interested in relative value and hedged strategies on the heels of a six-year bull market. On a regional basis, there is interest in Europe and Asia and finally, he mentioned there has been interest in market-independent strategies such as reinsurance, arbitrage and quantitative strategies.