(((They imagine they'll live forever, apparently.)))
(((I imagine all the clients also think they'll live forever, or they wouldn't be buying into the services of magic money wizards who lack succession plans.)))
http://www.moneyscience.com/Hedge_Fund_News/Hedge_Funds_have_trouble_planning_for_the_future.html
Link: Hedge Funds have trouble planning for the future | Hedge Fund News | News & Blogs | MoneyScience.
Thursday Aug 28, 13:07PM
On the whole, Senior Partners at established hedge fund firms have not done sufficient succession planning to ensure that their firms will operate as desired after a change in ownership according to "At Risk: Managing for the Future," a new survey conducted by CPA firm Rothstein Kass. In particular, very few hedge fund Senior Partners have planned for the death, disability or departure of another owner and the associated consequences for the firm and its operations.
"At Risk: Managing for the Future," Rothstein Kass' in-depth look at hedge fund firms and succession planning, was co-authored by Russ Alan Prince, a leading authority and counselor on private wealth, and Hannah Shaw Grove, a widely recognized expert on behaviors and finances of high-net-worth individuals. The survey was based on telephone interviews with 349 hedge fund Senior Partners at US-based hedge fund organizations.
Participating firms were segmented by assets under management, with almost 60 percent of the firms having total assets under management between $100 million and $750 million, with the balance exceeding $750 million. All of the companies represented had been operating for at least five years and had multiple owners.
"In analyzing our findings we were somewhat surprised to learn that partners are largely unprepared to handle ownership changes resulting from death, disability or termination. For example, fewer than 30 percent of partners are prepared to deal with the death of a managing partner. What was far more astounding, however, was the number of partners - nearly half - that did not know how to assess their level of readiness," said Rick Flynn, a Principal at Rothstein Kass' Family Office Group. "This is likely in part because these are difficult issues to deal with from an emotional standpoint. However, given the profound negative consequences that any uncertainty can have on an enterprise, it's apparent that the industry has underestimated the importance of thorough contingency planning." (...)
