Portfolio managers who've recently left established firms to launch their own shops are finding a growing number of consultants and plan sponsors who are willing to give them the time of day.
For some entrepreneurs, it has been a pleasant surprise.
"It shocked me a little bit" that big consulting firms and large, sophisticated plan sponsors have been so receptive to a newly minted firm, said veteran investor Quinn R. Stills, who left The Boston Co. Asset Management, LLC, Boston, with a handful of colleagues last year to set up Palisades Investment Partners LLC, Santa Monica, Calif.
More pension plan sponsors are seeing nimble startup firms as a promising source of sorely needed alpha. Last month, Chicago-based Boeing Co.'s $36 billion pension plan announced it plans to allocate $1 billion to emerging managers. William Atwood, executive director of the $10.5 billion Illinois State Board of Investment, Chicago, said he sees the fund's potential $500 million-plus program — of which only $80 million has been funded — as an effective way to identify efficient money managers that can add "pure alpha" to its portfolio. The long-term hope is that the program will serve as a "farm system," with Illinois eventually placing those young firms on its list of more established money managers for heftier mandates, he said.
A number of startup money managers have caught the attention of investors, including these: