At the same time that allocators are giving greater credence to smaller fund managers with shorter track records, the price of entry for emergent hedge funds is up.
The reason, too, is not from trading costs.
Inside AIMA and Marex’s survey into 180 managers and 50 worldwide institutional investors, a stark finding was that IR and marketing infrastructure changes are the most domineering factors in smaller firms’ rise.
The average head count at such managers has risen to 10 employees (which was only 7 two years ago), driven by investments injected into the IRs practice to improve the technologies, workflows and compliance protocols that fuel these professionals.
That’s helpful considering 72% of investors will choose backing a manager that runs under $100 million in AuM, who at this point are professionalising their workforce and operations to rival what was usually the break-in points for any fund: their size and performance history.
With client reporting and dedicated relations functions receiving greater resources earlier on in a fund manager’s journey, it shows the needle shifting from traditional customer service to something that investors clearly see as an advantage of smaller funds: a quicker way to adhere to what their audiences really want.
So, what does this mean for fund marketers?
The bottom line is that spend on marketing and IR teams does not have to wait before being ‘ticked off’ by the firm’s overall AuM. The consensus that can be drawn now is that infrastructure lays the groundwork for raising assets.
What it does also mean is that allocators – when conducting their operational due diligence at the consideration stage – will likely cast their gaze over the marketing and reporting function themselves, now a key differentiator for decision-makers.
In that light, funds should quickly determine how easily they can produce a clean pitch deck, DDQ, a client portal, or a compliant email template. A tech-backed process may make building investor-grade communications swift enough to see the asset-raising mission reduced from a three-year minimum to less than twelve months.
For sub-$100 million managers, this becomes an evidenced talking point in the budgeting roundtable.
For managers with more established track-records though, their once-differentiated IR operation is eroding slightly, now looking like table stakes for funds that are mere minnows by size comparison.
Source
AIMA/Marex, “Stacking Up: Emerging Manager Survey 2026” press release
