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Chicago Equity Advisors

How Chicago Equity Advisors Secured its First Institutional Investor Allocation

Date: 2020

Firm Type: Fund Manager
Asset Class: Hedge Funds
AUM: $0-25mn
Use Case: Fundraising, Benchmarking, Competitor Analysis
Users: Business Development
Headquarters: Schaumburg, IL, USA

The challenge: capitalizing on the momentum of an early fund lifecycle to raise capital

When emerging manager Chicago Equity Advisors (CEA) launched its first hedge fund (CEA Fund I) in 2016, it entered an asset class facing many challenges.

With no prior track record, a small network of individual investors, and word-of-mouth marketing as its main communication channel, the fund struggled to raise awareness to attract fresh capital and grow its AUM in its early days.

Despite the popularity of emerging managers1 and a novel investment approach fueled by years of experience managing various businesses, CEA lacked access to the wide network of institutional investors essential to secure the growth of the fund.

In addition, when it came to the firm’s operational infrastructure and human resources the fund lacked essential tools to support its investment reporting and investor relations. This made it harder to follow industry best practices, provide institutional investors with adequate support, and stand out from the competition.

The requirements: a solution to kick-start the growth of CEA Fund I

To get off the ground CEA needed to implement a viable solution to:

  1. Identify active institutional investors that would allocate to a fund like CEA Fund I
  2. Understand how its investment product compares against direct and indirect competitors
  3. Support its fundraising effort and investment strategy with access to valuable industry insight

Crucially, CEA needed a solution that would help it kick-start the growth of CEA Fund I and remove the ceiling of compliance restrictions that the fund was facing during due diligence processes in the early stages of its lifecycle.
Preqin is pretty much a standard in the industry for getting data and getting access to potential investors and their contact information.

The solution: a global network of allocators combined with the right set of tools to leverage it

With Preqin Pro, CEA instantly gained access to a global network of over 6,000 institutional investors actively allocating to hedge funds, with detailed profiles including investment preferences, fund portfolios, manager relationships, investment plans, ESG & impact policies, key contact details, and more.

To effectively search through these thousands of investors, the firm drills down on those who are currently allocating or looking to allocate to a fund like CEA Fund I by using a range of in-platform filters, and focus its resources on the most relevant fund allocators.

Once CEA zeroes in on a list of relevant investors it wants to approach, the firm can leverage Pro’s vast range of features to:

  1. Save that search for future reference
  2. Export that list into Excel to upload into the firm’s CRM
  3. Create a target list of relevant investors to keep track of
  4. Set up news alerts delivered direct to inbox, to never miss an opportunity
  5. Effectively plan its time on the road when fundraising with Pro’s Investor Map

From there, CEA is confident it has identified a list of strong prospects to start the conversation with. Nonetheless, the firm continues to rely on Preqin data to build a strong case when preparing to introduce its investment product to potential allocators.

With benchmarking functionality as standard, CEA has access to 390+ hedge fund market-level benchmarks. Powered by performance data from more than 23,500 hedge funds, these give CEA the ability to accurately compare its fund performance against direct competitors in the long/short equity market, or against wider hedge fund strategies.

With powerful in-platform data visualization tools, the firm can benchmark itself across a range of performance metrics such as VAMI, drawdowns, distribution, volatility, Sharpe ratio, risk measures, and trailing returns.

This analysis can also be customized and exported into a range of different formats to support CEA’s presentations when introducing themselves to potential allocators.

The result: secured a cornerstone institutional investor that grew AUM by 60%

With access to a wider network of institutional investors and with detailed competitor analyses supported by Preqin data, tools, and insights, CEA found more traction when meeting with relevant potential allocators for the first time.

Since subscribing to Preqin, CEA has managed to onboard its very first institutional investor – a large New York-based fund of funds – and as a result, increased its AUM by 60%.

This increase in AUM has enabled the firm to improve its infrastructure, invest in new resources to remove certain compliance restrictions it previously faced, and take advantage of momentum to attract the next wave of AUM growth.
1 Source: Preqin’s 2020 Global Hedge Fund Report.
Preqin is our number one vehicle to get into that institutional space and pitch to institutional clients, the only reason we were able to find this institutional client is because of Preqin. Without Preqin, I don't know how we would have found them.

Why Chicago Equity Advisors chose Preqin

  • Access to a global network of active hedge fund allocators curated from Preqin’s global coverage of 16,400+ private capital investors
  • Preqin’s 390+ hedge fund market benchmarks powered by performance data on 23,500+ hedge funds support CEA’s competitor analysis
  • Allows CEA to see the bigger picture with quarterly updates and global annual reports on the hedge fund industry
  • Provides great customer onboarding, with a Customer Service team available 24 hour-a-day, Monday to Friday

About Chicago Equity Advisors

Established in 2016 with investor confidence at the heart of its values, Chicago Equity Advisors (CEA) is a funds management company operating under strict business ethics and industry-leading fund administration.

The CEA team has deep experience in managing a wide range of industrial and financial companies, which it leverages in the long/short equity market to provide investors with an attractive investment product.

The firm currently manages CEA Fund I, which employs fundamental analysis to identify companies with a future value that will generate long-term positive returns for the firm’s investors, primarily through U.S. large cap and mid-cap stocks.
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