Direct Investing: An Innovative Solution for Managers to Raise Capital
Emerging managers are finding it increasingly difficult to raise capital. The financial crisis was the catalyst for a secular trend in the alternative investment industry that has seen the largest managers continue to grow while smaller firms find it challenging to stay in business. Despite the compelling evidence that emerging managers on average outperform their larger peers, investors have overwhelmingly selected the largest asset managers. Preqin, an alternatives research firm, estimates that the top 500 managers control 90% of assets even though they make up only 11% of the universe. Premier talent and an outstanding track record are no longer sufficient to raise capital for an investment fund. Investors now require best in class infrastructure which only larger firms are able to provide.
Fortunately, this is no longer the case. Our company, RueOne Investments, is leveling the playing field.
We are the first institutional quality platform to connect investors to a curated selection of direct investment opportunities. Through our web based portal, RueOne investors have the opportunity to evaluate and easily execute on individual deals in a fully compliant and secure environment. Investors are able to focus exclusively on the merits of a particular investment and rely on RueOne’s experienced team to underwrite each transaction. In addition to our extensive due diligence, each investment on the RueOne platform is sourced, structured, and managed by one of our partner asset managers.
RueOne enables asset managers with compelling deal flow to tap into the strong investor demand for direct investment opportunities. With volatile global markets and low interest rates, investors are looking for new sources of performance. They are willing to forego immediate liquidity in exchange for longer term returns. However, they require the ability to choose only the deals that meet their specific investment criteria and expect transactions to be structured to withstand potential market turmoil (as many funds are not). By partnering with RueOne, asset managers gain the credibility and infrastructure necessary to raise patient capital for individual transactions. Our extensive distribution network and innovative online platform greatly reduce investor touch points allowing managers to focus on what they do best, investing.