As someone who was born, raised, and has spent the majority of my life in the South, one of the things I’m required to love, besides SEC football, is Redneck Humor. From Trae Crowder, Corey Ryan Forrester, Roy Wood Jr., and Drew Morgan today to Ron White and Jeff Foxworthy a decade or so ago, I love poking fun at myself and laughing at my fellow rednecks. I can reliably drive on the backroads of Tennessee and come up with “You may be a redneck” moments every few miles, and my friends and me are up for our own hillbilly kudos when summer reliably finds us in a backyard with a baby pool and some PBR.

I even have a personal favorite “you may be a redneck joke” that makes me laugh every time I tell it:

“You may be a redneck if you think a tornado and a divorce have a lot in common – ‘cos either way, someone’s losing their trailer.”




A recent trip to the WellRED comedy show in Nashville got me thinking about all the ways in which, I as a redneck, can be defined. It also got me thinking about how we categorize and group other people, places and things in an attempt to make cosmos out of chaos.

There are few places in the investment world where there is more confusion than in the world of emerging managers. Ask two people what constitutes an emerging manager and you’re likely to get two completely different answers. Is it small funds? How small? Is it diverse funds? Ownership or fund management? Is it new funds? What’s the cut off? Does the manager need to be local? Does the manager need to be certified? What counts as a minority? Frankly, I find that emerging managers swirl in their own vortex of uncertainty.

So to help everyone out a little bit, I thought I’d use my 11+ years in the emerging and diverse manager space to create a handy-dandy checklist to determine whether or not a fund may be emerging. After all, it seemed like a great project for a winter weekend when 0.5 inches of snow has me pinned inside the house like the Southerner I am.

You Might Be An Emerging Manager If…

…you have less than $2 billion in AUM and manage long-only assets. Although this may seem reasonable on the surface, since the largest long-only fund managers may control trillions of dollars (with a “T”), it may still be a little large. In an August 2017 study by Richard B. Evans, Martin Rohleder, Hendrik Tentesch, and Marco Wilkens looked at 3,370 separate accounts (“SMAs”) managing $3,671 million and found those in the 10th percentile managed $5.38m, the 50th percentile managed $128m and the 90th percentile managed $1,470m, with a range of accounts from 3 to 15 to 305, respectively. In line with research about mutual funds, the authors found better performance in the smaller SMAs, in part due to liquidity constraints and market impact costs, but also due to increasing management complexity as the number of accounts increased. Take a look at the research if you’ve not seen it yet.

…you have less than $1 billion, and really more like <$250 million, in hedged AUM. (There are only about 700 funds with over $1 billion, so if you’ve gotten to that milestone, beating out 9,300 of your peers, I’d say you’d emerged).

…your firm is owned at least 51% by women or minorities for official certification, or has 33% women or minority ownership if you want to get a bigger crop of funds from groups that historically have had less assets with which to launch funds, and therefore may have partnered with firms or individuals that dilute the ownership structure.

…your fund is managed by women or minorities. This can be key for investors who are looking for cognitive and behavioral alpha (or differentiated networks for private asset funds), and may be more important to some than ownership status.

…the minority ownership or fund management in question is done by a U.S. citizen.

…the minority ownership is not by fungible personnel who were given ownership status simply to qualify for MBWE status (wives, daughters, back office personnel, figureheads).

…the fund is less than three years old or is a Fund I, II or III.

…the fund is not part of a mega asset management complex.

…the fund meets the above requirements and is located in the same state as the certain potential investors (Illinois, Pennsylvania, etc.)

…the fund is owned by veterans or disabled veterans.

Now, obviously there are all kinds of competing definitions out there, and there are also practical implications for investors, particularly larger ones. For example, if an institution manages billions of dollars (with a “B”), it may be difficult for them to look at the smaller end of the spectrum of emerging funds without having to assemble a massive portfolio of managers. Still, I hope these definitions may resonate with folks out there who are looking to capture some structural, cognitive and behavioral alpha. They may be a more successful investor if….


Sources: Preqin, SBA 

I seem to provide this information to newer and smaller funds often, so I thought I'd cut down on repetition and provide all you gorgeous small, new, and diverse fund managers with a short guide to early stage investors. Now start smiling and dialing!

(c) 1980 Paramount Pictures

(c) 1980 Paramount Pictures

State Plans To Prioritize

Arizona - Has made at least one investment in a large 'emerging' manager.

Arkansas - Teachers Retirement System reportedly tabled the program in 2008 but 2011 document shows active investments in MWBE managers. 

California - Looks for EM's based on size and tenure but prohibited by Prop 209 from looking at minority status or gender.

Colorado - Colorado PERA added an "external manager portal" in 2016 to make "it easier for us to include appropriate emerging managers when the right investment opportunities develop."

Connecticut - Based on size, minority status or gender. Awarded mandate in 2014 to Grosvenor, Morgan Stanley and Appomattox. 

Florida - Looks at emerging managers on equal footing with other managers. 

Georgia - Invest Georgia has $100 million to work with venture capital and private equity firms in the state. There is an emphasis on emerging managers and emerging funds per press reports.

Illinois - Perhaps the most active emerging manager state, based on gender, minority status and location. 

Indiana - Based on size, minority status, or gender. 

Kentucky - Reported $75 million allocation at one time.

Maine - Has made at least one investment in a large 'emerging' manager.

Maryland - Very active jurisdiction with details available online for gender and minority status manager information.

Massachusetts- Includes size, minority status or gender. 

Michigan - $300 million program.

Missouri - Status based on size. 

Minnesota - Past investments in emerging managers. 

New Jersey - Status based on size. 

New York - Status based on size, minority status or gender. $1 billion mandate in 2014. $200 million seed mandate in 2014.

North Carolina - Status based on size and HUB (minority and women owned) status.

Ohio - Status based on size, minority status or gender. 

Oregon - Emerging manager program in place. 

Pennsylvania - Status based on size with preference for minority or women run funds.

Rhode Island - Plan in place from 1995.

South Carolina - Status based on size.

Texas - Actively engaged with emerging managers. Status based on size, minority status or gender.

Virginia - Status based on size, minority status or gender.

Washington - Has issued prior emerging manager RFPs.

Oh, and if you reproduce this list, be sure to cite MJ Alts. Thanks y'all!

Seed Programs to Explore

Music to Groove To While Dialing for Dollars

The summer can be a magical time. Whether you’ve spent the past couple of months hanging out with family, taking a much needed vacation or getting sucked into the daily political dumpster fire in the U.S., most folks spend all of August (and most of July) focused on more leisurely pursuits. In the investment industry, not a lot gets done this time of year to be honest. But in just a few short weeks, watch out! The conference calendar will kick into overdrive, investors will start planning end of the year allocations (and redemptions) and you’ll need to jump back into capital raising and investor relations with both feet. 

To help you make the switch from porch swings and gin and tonics to panel discussions and bad chardonnay, I’ve enlisted the help of Emoji MJ to give you your “back to school” checklist. Be sure you pay attention, class…Emoji MJ may be taller, thinner and have tamer hair than I (aside: Emoji MJ is clearly French), but I’ve still heard she can be a real beeyotch.

(c) MJ Alternative Investment Research

(c) MJ Alternative Investment Research

1) The first thing you need to assess is whether you have the right staff in place for your marketing and investor relations efforts. If you're a smaller fund, you may be pulling double duty as both portfolio manager and the marketing staff, but even then, you should take time to think about whether that's the best use of your time and, frankly, whether you're any good at raising assets. If you do have internal or external help, make sure they are a good fit for your firm and have great connections with potential investors. If you're wondering what questions you should ask, check out my blog on The Vicky Mendoza Line And Fund Marketers.

2) Your next order of business will be to compile an investor hit list. This means taking a hard look at who your best prospects may be. This does not mean creating a wish list of investors that could write you an enormous check so you don't have to think about capital raising again. If you're sub $100 million, that likely means thinking about how you can meet additional HNW individuals and family offices and maybe a MoM (Manager of Managers/Fund of Funds) or two. If you're in the big league, your prospecting will obviously look a little different. For those of you who need a refresher on this particular step,  please revisit this blog on Targeting Potential Investors. 

3) The third item on your "back to school" prep list is to revisit your pitch book. Make sure it works for you, whether you're walking an investor through it, sending it in advance or leaving it as a follow up. Your pitch book is really an extension of you, so make sure it is as compelling and complete as possible, without overloading unsuspecting prospects with superfluous (or uninspiring) information. If you need pointers on building the perfect pitch book, please check out The Ten Commandments for Pitch Book Salvation AND The Seven Deadly Sins of Pitch Books.

4) Got your pitch book nailed down? Good! Now practice how you're going to convey all that juicy info into one 5 minute elevator pitch. That's investor, no matter how charming you are as a fund manager, is going to let you blather on to them endlessly at a cocktail party or during a conference break about your overall awesomeness, so now is the perfect time to perfect your pick-up lines. If you haven't given this much thought, or if your existing pitch isn't getting you to second base (actual non-conference contact with an investor), then take a moment to review these Seven Secrets to a Successful Elevator Pitch. 

5) While you're doing a little pre-season homework, it's probably a great time to refresh your monthly letter and tear sheet. Do you know how many times I get just a nekkid monthly (or quarterly) performance number plus YTD performance in a bland email? It's not optimal. So review the proper Anatomy of a Tear Sheet as well as these Five Tips For Great Monthly Letters. 

6) Conference season is about to go nuts. So in addition to picking up a gallon of hand sanitizer and some Tums (rubber chicken doesn't always digest well - and don't get me started on the vegetarian options at most events - WHAT ARE THOSE THINGS?!), you'll need to have a strategy. What conferences will you attend? How much can you spend? Speaking, sponsoring or showing up? You'll want to strategize to make the most of the time and effort you spend away from the office. To help you, check out these Conference Dos and Don'ts. 

7) After you meet a ton of new investor prospects at conferences this fall, wow them with your elevator pitch, performance and pitch book, and send a few outstanding monthly letters, you'll need a plan for how you'll stay in touch with them going forward. I mean, as much as a fund manager would love it if an investor "put out" on the third date, in these due diligence times, that's pretty darn unlikely. So how do keep communicating without driving anyone batcrap crazy? Try these tips for Staying in Contact With Investors. 

So good luck students! Emoji MJ and I hope you make the dean's list of capital raising this fall!

Cheers Emoji MJ Gif.gif



We've all been there. 

Moving, shaking, getting stuff done at an industry event. 

Hitting up investors for contact details and meetings. Meeting fund managers who can potentially add value to an investment portfolio. Looking for new business prospects among investors and managers. 

And then it happens. Knowingly or not, we commit one of the Seven Deadly Sins of Conference Attendance. 


There is perhaps no better way to curtail your most earnest conference efforts than to commit one of the following breaches of event etiquette:

The First Deadly Sin: Chasing Investors Like It's A Zombie Apocalypse

(c) Resident Evil

(c) Resident Evil

We all know the shark-to-seal ratio at most investment industry events isn't exactly even. As a result, the investors in the room tend to get a lot of attention. You can see them at cocktail parties, during coffee breaks, or just walking across a room with a trail of hungry investment managers and investor relations folks in their wake. Once, at a GAIM conference in Monaco, they gave out actual proximity detectors to participants. It was like watching the movie Aliens, with investors playing the role of Ripley.

I know every manager that spends money on a conference is hoping to get maximum time with investors, but please, slow your zombie roll. Don't mob investors, and try to keep your interactions to a bare minimum to keep the flow going. You're not going to sell anyone on your fund over a granola bar in a hotel hallway. Keep it simple. Your name. "I'd like to introduce you to my very interesting fund when you have a moment - can I get your card?" Move On. And if an investor is obviously trying to get somewhere (to the coffee, to the can, to a meeting) give them a little breathing room. They'll actually think better of you for it.

The Second Deadly Sin: Hiding From Managers

(c) Mean Girls

(c) Mean Girls

Probably as a result of the first deadly sin, some investors have taken to disappearing during networking opportunities (breaks, cocktails and lunches), in the hopes of grabbing a little peace and quiet and piece of mind. As tempting as this may be, it can be beneficial to resist the desire to escape the maddening crowd. I'm assuming that investors go to conferences to find great investing opportunities. Eating lunch in a bathroom stall (ok, your hotel room) probably isn't the best way to find them. 

The Third Deadly Sin: Cutting In Line

(c) Family Guy

(c) Family Guy

A panel of investors has just finished up. You really want to talk to one (or more) of the presenters. A line of eager fund managers and conference participants has formed as the panel exits the podium. You wait patiently while they smile, shake hands and give cards to those in front of you. Then, out of nowhere, someone comes up, jumps the line and starts chatting up the investor. Worse yet, the next session starts and everyone has to move to retake their seats, leaving dreams of making contact with those investors unfulfilled. NOOOOOOO! So you. Yes you line-jumping fund manager (or marketer). Don't. The investor knows you did it (even if they can't always stop you). The managers who were patiently waiting know you did it (and are silently fuming). And you just look kind of like a tool. Just say no to line jumping. 

The Fourth Deadly Sin: The Nameless Text

(c) Tropic Thunder

(c) Tropic Thunder

You managed to score an investor's card at a cocktail party, lunch or during a break. "What the hell," you think. "I'll send them a text to see if they have time to meet for breakfast or coffee in the morning." So you send a text: "Great meeting you last night. Grab a bite tomorrow am?" The only problem? The investor has NO FREAKING IDEA who you are. For all they know, this message could be a misdial from someone else's beer-goggled evening.

It's never a great idea to text investors anyway, unless you have an imminent meeting or they've given you express permission, but texting without identifying yourself and assuming that the investor will remember you out of throngs of fund managers is just silly. Include your name and the fund name. Or better yet, send an email. 

The Fifth Deadly Sin: The Drive By

(c) The Dukes of Hazzard

(c) The Dukes of Hazzard

Similar to the hiding from managers, the drive by occurs when investors, usually those scheduled to speak, attend an event only for their session. Fund managers, lured to pay event fees in part by the hugely cool and monied speaking faculty, get gypped out of their hard-earned dollars and investors get cheated out of finding good investment ideas for their portfolio. A true lose-lose.  

The Sixth Deadly Sin: The Close Talker/Cornering Folks

(c) Seinfeld

(c) Seinfeld

Conferences are crowded. Conferences are loud. Investors are scarce. One-on-one time is at a premium. That's still no excuse from getting all up in someone's personal space. I have literally been backed into a corner at an event before and, let me tell you, I was not amused. I also once attended a conference after just getting Invisalign. I wasn't entirely used to the Invisalign trays yet, and had just hurriedly scarfed a mint when I was corralled by a fund marketer. Before I knew it, the mint flew out of my mouth and landed on the marketer's arm. I tried to be cool - I picked the mint off of him, said "um, I think this may be mine," and slunk off. But seriously, if you're so close that an Arthur Bell promotional mini-mint with lisp velocity and zero aerodynamics can hit you with enough force to stick to your skin, you are too damn close. An arm's length for distance is a good rule of thumb here. 

The Seventh Deadly Sin: No Business Cards

(c) American Psycho

(c) American Psycho

This one can be a bit tricky as both investors and fund managers are at times guilty. Generally speaking, investors eschew business cards to avoid a post-conference email zombie apocalypse, while fund managers and marketers either don't bring them to (Machiavellian interpretation) force investors into giving their cards up, or because (poor planning interpretation) they underestimate how many cards they will need. 

Dear All: Conferences are networking events at heart. Bring cards and enough of them. That is all.

So there you have it.

Before you hit up your next Hedge Fund, Private Equity, Venture Capital, Institutional Investor or other industry event, make sure you are up-to-date on conference etiquette, or risk being judged in attendee purgatory.  

AuthorMeredith Jones

I love this time of year. The airport delays. The wonky weather. The smell of burning dust in the heating vents. Snow panic that empties grocery store shelves of white bread and whole milk, even if the temperature is stubbornly in the 40s.

Oh, and the look of shiny hope on the faces of fund managers everywhere. 


But before conference season road trips get too far underway, it's probably a good idea to think about where managers are spending their (finite) fund raising resources and where they could ease up on the gas. 

(c) MJ Alts

(c) MJ Alts