First-Time Fund Managers Do Better

How’s it going, everyone? Today, I want to tell you why first-time fund managers do better in 2023!

There are trillions of dollars that need to be managed by good asset managers!

I’ve worked with thousands of emerging fund managers, so today I want to share the unique advantages that they have.

Advantage or Disadvantage?

Many of you feel you have a disadvantage. You think that because you’re starting out, you don’t have as much potential…

This is totally false!

There are so many things going for you that you do not realize!

What’s an Emerging Manager?

It’s someone that can take money and make money. They simply manipulate a pool of investors’ capital to make more money.

Steven Schartzman raised $1B for his first fund.

If you don’t have the network like him right now, that’s fine!

Many of you will start with a micro-fund, which is a capital raise less than $50M.

So, what’s your advantage?

#1 You’re an entrepreneur

Investors love working with entrepreneurs. You’re more motivated, more passionate, and simply more likely to succeed.

#2 You have fresh industry experience

Whether you’re an underwriter, agent, or operator, you’re working in the field.

Many seasoned fund managers are analyzing the industry from afar.

Additionally, you’ll be able to better identify market gaps that spreadsheets don’t show.

This is good because…

Gaps = value add = additional returns

#3 More Likely to Succeed

It seems backwards, but first-time fund managers are 50% more likely to achieve an IRR of 25% or higher than experienced fund managers!

Why is that?

  • Alignment of interest: Larger funds can have bad years and still make money. Smaller fund managers are highly motivated to get good returns
  • Focus: You are only managing one product. Some fund managers help manage 20+ funds, which is cool, but their attention is split 20+ ways
  • Leverage: Investors know you will do anything to be successful on your first fund so use that and the points above to your advantage

Capital Raising Matrix

This graph shows the different levels of investors. This ranges from non-accredited to institutional investors.

However, for your first fund, you’ll raise from high net worths (>$1M) and very high net worths (>$5M).

But, be open to all types of investors because of this thing called momentum capital: the more money you raise the easier it is to raise more.

So, how would you apply this principle if you have a promising family office in your network?

Lincoln said in his video…

“First, I would raise a few hundred thousand/million from family and friends, then I would go pitch that family office.”

Those big clients are more likely to say yes if they’re not the first ones in.

Wealth Gap

Recent news shows that the middle-class population is declining.

More of them are either richer or poorer.

This means that there are more millionaires that need their money managed!

I’m not making this up… only 4% of money out there is invested in alternative assets – that’s 16% short of what it should be (see Lincoln’s video for clarification)!


Well, I hope you can now see why and how first-time fund managers do better.

Armed with fresh industry experience, entrepreneurial spirit, and a growing wealth gap, first-time fund managers are destined to succeed!

If you finally want to get started, then visit Fund Launch to get help from the experts!

That’s it for today!


Bridger Pennington

Want to get direct guidance for your fund? Schedule a time with my Fund Advisors!

DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the author

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