Investor Appetite for Alternative Investment Funds
February 16, 2023
In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman, Director, Publications, EisnerAmper, speaks with Audrey Weitz, managing director at New York-based Old City Investment Partners. She shares her outlook for investor appetite for alternative investment funds including the greatest opportunities and challenges, her experience being a woman investment manager in the industry and how she is inspiring other women to go into finance.
Absolutely. So to kick out the conversation, tell us a little about the firm and how you got to where you are today.
AW:Okay. Just one, I will and once correction, I'm not an investment manager, but I am an investment professional, I would call myself. So Old City Capital, we source niche asset managers all in the Alt space. We often work with managers relatively early in their careers or either early in the iteration of their career. We often are charged with bringing seed and founders class investors to managers as they start off on this new path. And we've helped multiple managers scale from the 10 million or so of friends and family capital 25 million to over a billion to date. So it's been really rewarding for me to be a part of that growth with a few of our managers.
EMS:Absolutely, Audrey. So given your focus on finding funds for investors, I would love to hear outlook overall for investor appetite.
AW:Sure. I would say that we deal with really sophisticated investors, not the types who are following social media trends or buying stocks based on something someone puts on TikTok. And as you know, sophisticated investors are always looking for smart ways to place their capital. They're looking for asset managers who know how or have figured out a way to capitalize on market inefficiencies. It's something that we pride ourselves on finding for our investor base.
My particular base of investors is particularly focused on capital preservation in general, obviously with some upside, but the former is really what their focus is and if there's some sort of tact efficiency at play that's always a little bit more attractive.
EMS:Great. Audrey, as a follow up question, what strategies are investors most excited about and why?
AW:Today in particular, I would say most investors are looking at diligencing or actively sourcing distressed opportunities, and that could be in any type of strategy, real estate, private credit. I do a lot in private credit, something I understand. I've worked with a few private credit managers and the ones who have built successful businesses and weathered the past few years well are really in a nice position to grow their businesses today.
EMS:And Audrey, what about on the other hand, some strategies that maybe are less exciting and why?
AW:I think each person in my seat would have a different answer for you. For me in particular, my investor base is really much less focused on your traditional long-short equity manager. I have never done that much in this space. I do have one manager that I have been working with since pre-pandemic, a really smart young, humble guy who is in the long-short space, kind of a value manager, small-midcap. But in general, even though my investor base is less focused there. I am hearing from investors who did allocate some capital or significant capital that those type of typical long-short managers are less attractive for them today.
EMS:Great. Audrey, to shift gears a little bit, you're a woman in the business, it's a huge inspiration, so I'd love to hear your thoughts on that and what you're doing to inspire other up and coming women to go into this field.
AW:Thank you for saying that. I have always been very transparent that my background was not in finance when I started this career. I started almost 10 years ago. Broadly speaking, there are many more women on the marketing side of the business than there are on the asset management side of the business. I really do hope that changes and I think most women I meet also hope that changes. It's rare that I am sitting across from a female portfolio manager. It does happen and we do have one that I love. She's a total superstar. I think in order to make that goal a reality, the pipeline of women, young women in finance obviously, really needs to grow in order to change the reality of whether or not there will be more women asset managers.
I would say that, for me personally, I would be lying if I said I wasn't scared when I started this business. I certainly didn't know most of the answers to the questions I was asked. I was always transparent about that. My firm took a chance on me and taught me the ropes, but I also took a chance on myself. And that is one message that I'm constantly shouting from the rooftops and whispering in young women's ears that they need to believe in themselves, they need to trust themselves, and they need to take chances on themselves.
I think that for those, the assets managing side of the business requires a lot of technical expertise. There are other fields in finance that don't require that same expertise, but that require a high degree of social intelligence, of hard work, grit. And there are many, many women, on both sides, who have those abilities. And I hope that they believe enough in themselves to exercise their capabilities and jump into this field. It's a great field for women.
EMS:Absolutely, Audrey. We covered a lot of ground today, so I would love to hear your final thoughts or takeaways you wanted to share with us.
AW:We didn't touch on my personal life, which I just think is important because it always has a little bit of a shock value for some people. I'm a mother of five. My oldest is 21 and my youngest is 13. Four of those five are girls. So I think my future plans and anything I'm doing really puts them at the forefront as well as my very supportive husband.
But for me, my goals and plans, on the business side, are focused around continuing to build my investor base. The investors that I have worked with since day one put their trust in me and took a chance on me when I was starting out, and I have developed really nice and deep friendships with many of them. So I appreciate that. And on the asset management side, my goal is always to work with managers for the duration of their careers. A personal goal of mine is to always be the one, the placement agent that they come back to after we finished fund one or even fund two, that they're coming back for the next one. And so far I've hit that 100% of the time. So I hope that that continues to happen.
EMS:Well Audrey, first congrats and all your success. And second, I wanted to thank you for sharing your thoughts with us today.
AW:Thank you, Elana, for having me. It was really nice of you to invite me. It's my first ever podcast, so I appreciate the opportunity.
EMS:Absolutely. And thank you for listening to the EisnerAmper Podcast series. Visit eisneramper.com for more information on this and a host of other topics. Join us for our next EisnerAmper Podcast when we get down to business.
Transcribed by Rev.com