INVESTOR VIEWS series features:
Terry Purcell, Partner & Co-CIO, Longwall Family Office

Terry Purcell of Longwall Family Office talks about how his experience at a CT pension fund and a $20B fund of hedge funds helped shape the manager qualification process at Longwall. Plus, what Terry and his team looks for in a fund manager, how they source managers, pitfalls to avoid, and important trends Terry is keeping an eye on in 2024.

SHOW HIGHLIGHTS

In this episode, Terry and I talked about:

    • How the financial crisis of 2008 impacted fund management today.
    • What Longwall looks for in a fund manager — criteria that matters most.
    • Why Longwall is partial to emerging managers.
    • Their preference for ‘specialists.’
    • The importance of managers having a significant portion of their liquid net worth invested in their strategy.
    • Longwall’s take on fund fee structures.
    • Annual events the Longwall team makes sure to attend.
    • Why you should explain the position your fund will fill in an allocator’s portfolio.
    • Why style drift can be a deal breaker.
    • The characteristics of Longwall’s fund manager success stories.

KEY QUOTES/TAKEAWAYS

5:36 | “I’ve always been partial to emerging managers, a lot of great performance, obviously, as you know, comes early in the funds lifecycle. So, if you look across the roster of managers at Longwall you’re not going to see any really large hedge funds. There are cases where size does become the enemy of performance.”

11:29 | “I’d advise emerging managers to spend a lot of time on their DDQs. That’s a really important aspect, particularly for for smaller managers. We get a ton of information there, particularly about the operations and mechanical things that are outside, you know, the investment process, like money movements and service providers. The policies and procedures that have been put in place.”

19:00 | “It’s really beneficial to be able to espouse your differentiators right up front so that you stand out from the pile of decks.”

25:27 | “I think the success stories are the managers that not only come out of the gate and start with strong performance records, but put the infrastructure and the right things in place to run their company. Because it’s very difficult to run a portfolio and a company at the same time, and I speak for experience as somebody that started a hedge fund, it’s very difficult. So to me, a success story is a manager that is not only generating good numbers, and pursuing the strategy and has a great risk management process and all that on the investment side, but also has put the proper infrastructure in place.”

AUDIO OPTION

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GUESTS

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