Fund Survival: Focus On Risk, Not Overheads

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Professional money management is an ever-changing industry. This is especially true in the investment fund arena, which has seen somewhat of a shift in 2020.

For many fledgeling funds, the name of the game in the early years is survival. 

Before the pandemic, I would have said that controlling operating costs is the most important thing a new fund can do.

But things have changed.

Don’t get me wrong – controlling operating costs is still incredibly important. However, I think controlling risk is now the number one priority.

Ask yourself this question. What happens to your fund if your broker or bank goes under? The scenario is unlikely – but if this year has taught us anything, it’s that preparing for the unexpected is critical.

So how does an investment fund protect itself against risk? The answer lies in diversification. Practically, it means having multiple service providers. Use two or three reliable brokers. Open multiple bank accounts. Protect your fund if the unthinkable happens.

As a fund administrator, IFINA is well placed to help you diversify your service providers and protect your fund against risk.

Do you want to create your own Investment Fund?

If you want to create your own Investment Fund, just email me. I’d be happy to talk you through how it works in further detail.