Stable Asset Management’s CEO Erik Serrano Berntsen Discusses the Firm’s Belief in “Specialist” Managers
Erik Serrano Berntsen, CEO of Stable Asset Management, a London- and New York-based investment firm focused on seeding managers and building asset management firms, argued “specialist” managers, defined as capacity constrained and lacking experience managing substantial outside investor capital, often present some of the best seed opportunities because of their robust investment ideas.
At EisnerAmper’s January 27 Emerging Manager Roundtable which attracted just over one dozen up-and-coming hedge funds, Serrano Berntsen discussed why the firm is bullish on that group of managers.
“We like that because it means we can get a high-quality manager from an investment point of view,” he said. “The best talent in mainstream strategies isn’t available to seed.”
Serrano Berntsen specified that “specialist” managers typically run a strategy that can deploy only $750 million to $1 billion at the onset. They have also not accumulated as much wealth since they historically haven’t managed a lot of assets. And further, they are often less institutionalized since they didn’t work at the biggest hedge funds. Finally, they have less experience interacting with investors.
Additionally, Serrano Bernsten specified that Stable focuses on 3 areas when seeding a manager:
- the investment strategy -- whether the manager has good risk discipline and experience running various AUM levels;
- operations -- how expensive the fund will be to run; and
- commerciality -- if the investment strategy is going to be an attractive investment opportunity to investors and if the manager is going to be able to smoothly interact with allocators.