The Gig Economy Comes for Hedge Funds
Platforms that offer money managers the freedom to build a business and maximize their return on performance while removing the hurdles of launching independently could change financial markets.
Finding new stars.
Photographer: ANGELA WEISS/AFPThe explosive growth of the gig economy is one of the most important labor-market trends to emerge since the 2008 financial crisis. Companies offering ride sharing, do-it-yourself property rentals and a host of other services have upended traditional sectors. It was only a matter of time before the gig model moved to hedge funds, becoming the industry’s fastest-growing segment.
If the trend continues it could have a big effect on financial markets by making it easier for a wider assortment of unconventional managers to rise in the industry and offering investors better and cheaper access to them.
Much like any gig company, hedge fund platforms connect customers (investors) with service providers (money managers). A key feature is that providers, managers in this case, can offer their services on multiple platforms, or independently work directly with investors. The main appeal for managers is they do not have to choose between the risk and trouble of starting their own funds, and the restrictions of working for an asset management company. The gig platform provides many of the centralized services and some of the security of having an employer, with the freedom to grow your own business.