The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Eaton Vance disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Eaton Vance are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Eaton Vance fund. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results.

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Rise to the Challenge of Attracting Fund Partners

By Holly SwanExecutive Director, Advisor Institute

Private equity, venture capital, real estate and hedge fund partners are appealing, yet uniquely challenging, wealth holders to attract.

Fund partners are a hybrid of entrepreneurs and financial advisors. They know the business, and, in many cases, their returns may be better than yours. So, why would they choose to work with you? The answer lies in your ability to identify gaps in their financial planning. Ask these two questions to demonstrate the expertise you bring and reveal yourself as a valuable asset.

  1. "What is your approach to counter-balancing the exposure you have through your fund?"

    Fund partners may need help balancing risk. If they are taking a lot of risk in their fund investments, they need someone to manage their safe money. Conversely, if it's a hedge fund with an absolute return focus, or a real estate fund that they view as a proxy for fixed income, they might be looking for someone to manage their high-octane money. Think of it as a scale with you as the counterbalance to their fund investments.
     
  2. "How are you managing your uneven cash flow?" 

    Liquidity management is another area where fund partners may need your help, especially younger partners. Balancing capital calls with irregular income schedules can be difficult, even for the very wealthy, and they often need a safe place to park cash and a way to access credit. You can fill this gap by offering comprehensive cash flow planning that helps fund partners avoid unanticipated capital gains consequences caused by needing to quickly sell assets in order to free up funds.

Bottom Line: Attract fund partners by showcasing your awareness of their unique planning challenges and demonstrating your ability to identify opportunities.