With the rise of alternative investments, more investors are looking into niche asset managers like Strive Asset Management. As a relatively new firm, Strive has been gaining attention for its unique investment strategies. However, investing in a lesser-known asset manager requires research. This article provides tips for those interested in investing in Strive Asset Management. We’ll cover Strive’s background, investment strategies, performance history, risks, and fees. With the proper due diligence, investors can determine if Strive aligns with their investment goals and risk tolerance. By understanding Strive’s approach, investors can make an informed decision on allocating capital to this emerging asset manager.
Research Strive’s investment strategies and track record
Strive Asset Management was founded in 2010 and specializes in liquid alternative investments. Two of its flagship funds are the Strive Partners Fund which focuses on relative value fixed income, and the Strive Opportunities Fund which utilizes several alternative strategies. When researching the firm, pay close attention to its investment philosophies and performance over time. Review materials that explain its strategies in detail and analyze the risk and return profile of its funds during different market cycles. Look at both returns and risk-adjusted returns compared to benchmarks. While past performance is no guarantee of future results, this analysis can determine if Strive has demonstrated skill with its alternative investment approaches.
Understand the risks associated with Strive’s approach
While alternative investment strategies have the potential for higher returns compared to traditional long-only funds, they often come with higher fees, complexity, and risks. Since Strive employs leverage, derivatives, and other sophisticated methods, it’s crucial to comprehend the risks involved. Beyond market risk, these alternative strategies can expose investors to counterparty risk, leverage risk, liquidity risk, and model risk. Investors must determine if they have the risk tolerance for Strive’s dynamic approach which may exhibit higher volatility. It’s also wise to evaluate how much exposure to alternatives is prudent within the overall asset allocation.
Assess Strive’s operations as a young asset management firm
In addition to evaluating Strive’s investment process, it’s important to examine the stability and maturity of the firm’s operations. As a relatively young company, Strive is still building out its infrastructure and track record. Review the bios of the firm’s partners and research their background managing alternative strategies. Also consider the firm’s regulatory compliance program, risk management framework, and back-office systems. While a newer asset manager can exhibit tremendous growth and performance, they may encounter growing pains. Analyze if the firm has the operational foundation to manage increasing assets under management.
Compare costs and fees to other alternative asset managers
Since alternative investment strategies are more complex and labor-intensive, they tend to carry higher fee structures than traditional long-only funds. However, fees can vary greatly across alternative managers. Scrutinize Strive’s management fees, performance fees, redemption fees, and other expenses. Then compare them to competitors in the liquid alternatives space as well as hedge funds employing similar strategies. Determine if Strive provides value proposition relative to costs. Also assess if incentive fees align the interests of the investment managers with those of the investors.
Conducting thorough due diligence is crucial before investing with an unfamiliar asset manager like Strive. Take the time to understand their investment strategies, risk management, operations, and costs relative to other alternatives. Every portfolio and investor has unique requirements and preferences. With careful analysis, you can determine if entrusting capital to an emerging manager like Strive aligns with your needs and can potentially enhance your portfolio’s diversification and risk-adjusted returns.