“Alone we can do so little, together we can do so much.”
There aren’t many people in the world willing or capable to write a five or ten million dollar check to any business, much less a new venture in the hedge fund industry. Because of this, we recognize the importance of our capital providers and their commitment to place essentially permanent capital with our managers.
In addition to the capital, our seed providers can act as references as referrals to help grow the business, benefiting all parties. We typically project that referrals from the seeder will generate 3x the initial seed investment in the first two to three years.
Experience and Fairness
We do what works. We don’t stick to a common playbook or structure “just because”. We insist that our portfolio managers receive the majority of the economics of our seed transactions. We do not use hurdle rates that tend to demotivate the portfolio manager. We believe these key features help to make our structures a win-win for all parties.
Managers are free to pursue their strategies without looking over their shoulders at “hot money” investors. Managers can also focus on investing and portfolio construction while Ashton Global and the seed provider handle most of the other operational tasks, and help to grow AUM.
Mentoring and Support
Our firm is structured very much like “Shark Tank for Hedge Fund Managers”. We match you with the right investor, and they provide legal, tax, clearing, marketing, and fund administration support to help the emerging manager grow the business. In exchange, the seed investor will typically receive between 30% to 45% of the management company equity, with the manager retaining the majority-share.
Incorporating ESG into the Investment Process
Investing in companies that will outperform over the long run is one of our main goals at Ashton Global, and ESG is one way to do that. ESG investing prioritizes factors that will become more important in the future.
At Ashton Global, we look for consistently profitable companies that have what Warren Buffett calls economic moats. These firms have managed to elevate themselves above the price competition that inevitably pushes profits toward zero.
We have a focus on management like most institutional investors, and we realize that management can destroy value in a company through poor governance and fraud. Managers can also destroy value through improper recognition of regulatory frameworks which are constantly changing.
By focusing on ESG criteria, companies can build their reputations among key stakeholders and enhance the value of the firm. As the world becomes more affluent, future generations of consumers are also likely to place an even greater emphasis on ESG. We insist that all of our portfolio managers incorporate ESG considerations into the investment process.