Alternative Investments: A Deeper DiveThe Basics to Survival, 2nd Edition
by Vincent Sarullo, Co-Founder, Tower Fund Services
A comprehensive overview of the business of starting, running and investing in hedge funds, private equity, venture capital, real estate and fund of funds.
Over the past few decades of working in the alternative investment industry as a CFO, CCO, and now the co-founder of a fund administration company, I have realized that many people have little idea of the basic concepts of what these funds are and what they do. It’s no surprise when someone I know who is outside the industry asks “what exactly is a hedge fund?” and then, after a high-level explanation with some basic comparisons to things in the investment world they might know, I get the simple nodding of the head and the look that tells me they still don’t get it.
As much as I expect there to be a lack of understanding on the part of non-industry related people, I find myself spending countless hours consulting with traders and other investment professionals who plan to start their own investment management firms, and we go over many or all of the topics covered in this book. The simple fact of the matter is that most, if not all, new managers have worked as traders or investment strategists at large firms or banks where everything has been taken care of for them, and the only thing they have to focus on is their investing. They never get to see the magic behind the curtain. I love being the one who shines the light that allows them to learn all these things and then make successful investment companies. It’s one of the best parts of my job.
The information contained in this survival guide for the alternative investment manager is by no means a set-in-stone, “one way or the highway” view of the industry. In fact, I hope it prompts others to voice their views. As my volunteer firefighting experience has taught me, we must “improvise, adapt, and overcome” in this ever-evolving industry. I expect that by reading this book, you will gain a solid understanding of the various fund types that make up the alternative space. More importantly, if you are a new fund manager, I hope this book will compel you to ask more questions of those you work with and seek answers to your specific needs.
I offer general overviews of the various fund types in the alternative investment world, including hedge, private equity, venture capital, and real estate funds, to name the popular ones. For each type, you will find a description of how these funds are typically structured, how they operate and specific things to consider when looking at your fund setup. For the investors reading this, I hope I point you in the right direction with questions and topics you should ask your current and/or prospective fund manager.