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FUND BOUTIQUES & PRIVATE LABEL FUNDS: Seed money, Theodor Fontane and the resilience factor… (Interview – Norbert Wolk)

“Courage is good. Endurance is better. Perseverance is the main thing” (Theodor Fontane). Whether with liquid or non-liquid fund products – in the search for seed money, it can sometimes take a lot of stamina to reach your goal. Markus Hill spoke on behalf of FONDSBOUTIQUEN.DE with Norbert Wolk from the start-up company Barbarossa asset management about the practical experience in approaching investors, challenges, and the special importance of the factor resilience in turbulent times on the stock exchange.

Hill: Which fund project are you currently working on more exclusively?

Wolk: We at Barbarossa asset management are planning to launch an endowment fund as initiator and advisor. This fund should be mixed, the returns will mainly come from equities and risk premium strategies, by which the entire investment process will be carried out using a systematic trading model. In contrast to many “new” fund initiators, this model is backed by a manager who already has a long track record and a certain degree of recognition in the industry – it is not a concept based solely on backtesting. During the current crisis, the system has once again proved its worth. As the name “endowment fund” suggests (nomen est omen), it is designed to meet the needs of a foundation. On the one hand, regular distributions are very important for a foundation (preferably quarterly) to be able to fulfill the purpose of the foundation. On the other hand, the focus must also be on risk management to avoid extreme drawdowns. After all, the capital stock should not be attacked. Of course, this applies not only to foundations but to everyone concerned about these issues.

Norbert Wolk, CEO at Barbarossa asset management

Hill: How would you describe your experience in the current search for capital?

Wolk: We have only been in business for 8 weeks, but the approaches, how and in what the fund invests, have been in place for much longer. Rome wasn’t built in a day, so it takes a little longer. Especially the topic of seed money searches is proving to be difficult and time-consuming. It’s not that we don’t have a network, but I still have to say that investors are very cautious. I don’t think it’s because of the current Corona crisis, but it’s probably a general phenomenon. According to the motto: “What the farmer does not know, he does not eat”. Then there are always questions like: “Is there any backtesting?” And then I say: “Well if you want to cover the costs of backtesting, I’d be happy to do so”, for once the basic concept of our fund is based on the practical track record of our manager. We work with risk premiums and if you ask at the stock market what historical data costs, they’re left speechless. It’s not feasible. I would also like to see a little more empathy; by that I mean that as a “seeker” you are also taken seriously and not as an annoying blowfly. For me, this also includes something like replying to an e-mail. This answer can also be very short, but that’s just part of good manners. For example, I have currently written to 97 asset managers, only six of whom have sent me a reply. So there is still a lot of room for improvement. But the good thing about the current seed money search is getting to know new people. Since I am a Rhinelander, it is also in my nature that I enjoy it. But having success once in a while wouldn’t hurt either. Once the fund is up and running, you have of course already done a lot of preliminary work and you will have “warm” contacts.

Hill: What do you think are the challenges of your project?

Wolk: The challenge in the whole seed money-search process is certainly not to stop. We have such a great product, I am 100% sure that this will lead to success in the end. You just need, as Oliver Kahn said, “big balls”. You shouldn’t get frustrated when you hear the umpteenth reason why it doesn’t work. We also thought about what else might interest a potential seed money funder and so we decided to give up a company share to make the package more attractive. One should always look from the other person’s point of view to be successful in the end.

Hill: What are your next steps and expectations in the further process?

Wolk: I look forward to getting up every morning and starting the day with a lot of energy. Because every day is a gift from God, and that’s how we should see it. Always think positively. In the meantime, we have also offered a potential seed money funder the prospect of a stake in Barbarossa asset management. I am looking for a reliable partner who is as motivated as we are and recognizes the opportunities we have. Just like Antoine de Saint-Exupery: Don’t just look at each other, but look in the same direction.

Hill: Many thanks for the interview.


Barbarossa asset management:
https://www.barbarossa-am.de

Input, ideas, suggestions on the subject of “Seed Money” and fund boutiques in the liquid and non-liquid fund sector are always welcome: redaktion@fondsboutiquen.de

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