|Bill Gross added personal money into his fund. It's an illusion|
to make it appear larger to sophisticated investors. This woman
isn't really holding a tiny man in her hand at the beach.
According to a story in the Wall Street Journal, more than 60 percent of the assets flowing into the fund in the initial months came from Bill Gross' personal financial advisors office. Why? One possibility is Gross really wants to eat his own cooking and invest in his own fund.
Another may be he knows in order to position his fund competitively with pension funds and other sophisticated investors, his fund would have to reach certain asset levels. He knows it's is easier to grow through his own money, his personal advisor client money, or other internal audiences, than outside investors.
Some firms require $1 billion to be considered. Others require $100 million.
As one client told me, "The first billion was tough. Each additional billion became exponentially easier."
I've heard similar comments from boutiques that the initial $50 million was challenging but once that point was reached, each additional $50 million became easier.
We often suggest to clients they add personal, family money or assets from separate accounts into the fund to make the fund appear larger, if they can. That inflated asset level, although an illusion, can make the difference between getting a sale versus dealing with a size objection.
Did you consider adding internal money to your fund to make it appear larger?