💯 Thank you HKMC and Michael Downing for the shoutout 🙏🏻
The Emerging Manager Archetype: Financial Entrepreneurs Driving VC's Future At HKMC, we continue to see a growing opportunity that deserves attention: the rising power of emerging managers, the "financial entrepreneurs" redefining venture capital. In our last post, we highlighted the gap between LPs and emerging managers. Today, we explore the archetype of the emerging manager—and why recognizing them as financial entrepreneurs could shape venture investing’s future. Who Are These Financial Entrepreneurs? Emerging managers aren’t just raising capital; they’re building value by blending expertise, vision, and nimble decision-making. As LPs face the 2024 paradox of sticking to established firms or looking forward, it’s clear these emerging players offer something distinct. 1. Agility and Decisiveness Emerging managers excel at quick decision-making, avoiding the institutional layers that slow larger funds. They spot trends and move fast in high-growth sectors like AI and climate tech. 2. Deep Specialization and Unique Access Instead of casting wide nets, emerging managers focus on specialized sectors or geographies, leveraging their unique backgrounds to gain proprietary deal flow. Their expertise is their differentiator. 3. Innovative Approaches to Liquidity With liquidity concerns high in 2024, emerging managers are adopting creative strategies—secondaries, strategic M&A, and innovative fund structuring. This flexibility is a competitive edge. 4. Founder-First Partnerships Emerging managers often build deeper relationships with founders, offering more than just capital. This alignment of interest makes them strategic partners, especially in early-stage company building. Why LPs Must Embrace This Archetype Now In a time where established funds dominate capital raising, LPs risk missing the transformational potential of emerging managers. These financial entrepreneurs blend venture acumen with entrepreneurial grit—investing with conviction in spaces that will define the next decade. We believe LPs should rethink capital allocation. Emerging managers aren’t just betting on the future—they are shaping it. And those who back them today will be the ones who stand at the forefront of tomorrow’s venture capital landscape. Signing off for now, we share our public appreciation for the Emerging Manager support efforts of Cendana Capital, FirstLook Partners, Marion Chebet, Yale Investments, and even those of other institutional investors like CalPERS, Teacher Retirement System of Texas, and New Jersey Division of Investment.