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Launching a Mutual Fund Three-Part Series

May 8, 2018 10:00:00 AM  |  '40 Act

Posted by Jace Schuppan

Launching a Mutual Fund Three-Part SeriesLaunching a ’40 Act mutual fund can be an exciting endeavor for investment advisers looking to expand their solutions footprint.  As with any new venture, it requires prudent forethought and planning to ensure the best chance of success.  Usually when an investment adviser initially explores launching a mutual fund, they think about the outright initial costs associated with launching a fund, along with setting up the structure, timing and various regulatory aspects. In addition to these considerations, investment managers also need to keep in mind the cost of success, the true cost of launching a mutual fund; what may help make the fund successful in the long run. The evolving regulatory and distribution landscape can be intimidating, but with thorough preparation, planning and the right partners, potential pitfalls can be avoided and helpful insights can be gained that may lead to greater success. 

To address these various facets, we have created a special three-part series to help set the stage for planning a successful fund launch and will review some answers to questions that investment advisers frequently ask.

Over the next three consecutive weeks we will present three insightful installments of this 'launching a mutual fund' blog post series. In Part 1, we address the ‘costs of success’, which are the investments an adviser needs to make to help pave the path to success, like the time it takes to create a well thought out business strategy and the effort it takes to shape a sound marketing and PR strategy. Then, in Part 2, we'll answer the top 5 questions typically asked during the exploratory phase of launching a fund. Lastly, in Part 3, we’ll look at the final frequently asked 5 questions that deal with compliance and regulatory areas of fund launches.

Part 1 – Launching a Mutual Fund: Costs of Success

  1. Source of Investors: Identifying your target audience
  2. Marketing Efforts
  3. Knowing and Telling Your Story
  4. Creating a Solid Online Presence
  5. PR Strategy
  6. Planning for Intermediary Platforms
  7. Hiring Sales Talent

Part 2 - Launching a Mutual Fund: Top 5 FAQs

  1. What is the timeline for creating a ’40 Act mutual fund?
  2. What is a Series Trust?
  3. How much does creating a ’40 Act mutual fund cost?
  4. What is the typical breakeven for a mutual fund?
  5. How much in seed assets are required to launch a fund?

 Part 3 - Launching a Mutual Fund: Compliance and Regulatory Insights

  1. What are the general limitations in a ’40 Act mutual fund?
  2. Can a performance fee be charged by the adviser?
  3. What is a fulcrum fee and how does it work?
  4. Can the track record from Separately Managed Accounts (SMAs) be used to market the fund?
  5. Can a hedge fund be converted into a mutual fund?

Read Part 1 here!

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If you are considering launching a mutual fund, see our full resource page and downloadable e-book on this topic. Or if you are interested in an in-depth conversation regarding your opportunity, please Contact Us to receive a customized consultation.


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