Article by Maury Cartine, Partner-in-Charge of Marcum's National Alternative Investment Industry Group Tax Department, "Moving into the Role of Hedge Fund Manager – Did You Think of Everything?," Featured in the HFMWeek
Maury Cartine, Partner at Marcum LLP, Identifies the Most Commonly Made Mistakes Made by New Hedge Fund Managers
Recently, my spouse and I decided to move to a new home – a relatively new experience, since we had lived in the same home for 23 years. We thought everything was under control as we had done this before. We hired the best moving company, and we hired the best home inspector to examine our new home. Nonetheless, it was absolutely astounding how many things we had to do and how many things we forgot to do. Did we inform the utility companies we were taking over? Did we notify the post o ce, the banks, the credit card companies and the insurance companies of our new address? Did we arrange for internet service and cable TV? Did we purchase insurance coverage for the new home? Some of the mistakes seem silly now, but it was not so silly at the time!
This moving experience reminded me of the countless money managers I have met over the past 25 years who were moving on to start their own funds. Like me, they thought they knew enough to get by. After all, they were leaving well-respected investment banking firms and had little left to learn. Big mistake! Whenever a money manager goes out on his own, the choices and decisions along the way can be endless. After all these years, I have identified some of the most common mistakes. Some are just silly, but some are silly and hazardous! It might be helpful to the next crop of would-be hedge fund managers to consider some of these potential mistakes before they happen.