Many hedge funds are successful because they stick to their guns, focus on the strategies that produced returns in the past, and are savvy enough to see emerging trends and what’s likely to happen around the next turn. And that’s where hiring consultants comes into play.
Looking at hedge funds in particular, as we’ve mentioned in previous blog posts related to family offices and other financial institutions, many times they operate in bubbles. At the same time, bringing in a consultant with no ties to the business – outside of that bubble – but with full clarity into the markets can provide a new perspective in a multitude of ways.
Going back to the core of this post, here’s our feedback after guiding hedge funds around the world:
What value does a hedge fund consultant provide?
Imagine being a horse trotting down the street with blinders where you can only see what’s right in front of you versus having full clarity into the big picture – that’s one of the biggest benefits of a hedge fund consultant. If your fund is going to drop $100M tomorrow on something speculative you have to implement processes to ensure you win in the end.
Should my hedge fund hire an outside consultant?
This is a loaded question that depends on a wide variety of factors ranging from if you’re happy with the current performance and, if not, seeing ways to maximize returns by exploring new opportunities/solutions. Essentially, bringing on a hedge fund consultant that helps you see the real light at the end of the tunnel.
How much does a hedge fund consultant cost?
The most notable, highest-paid hedge fund consulting firms charge millions of dollars per engagement though they are worth their weight in gold, and in the end that pays off for everyone. The point is, if someone charges a hedge fund $1M for consulting services that produce a 10x return that ROI will always be worth it; hence the value of consultants that deliver unique strategies to hedge funds.