Frequently Asked Questions
Clarity around the most queried aspects of our program.
Boutique and emerging managers may offer historically higher returns and an attractive risk/reward outlook, especially in inefficient asset classes. Institutional investors may also gain diversification, a strong alignment of interests, broader and deeper company access, and early introductions to the investment industry’s rising stars.
A manager of managers is a financial intermediary that hires professional investment managers to oversee aspects of a client’s investment fund. A fund of funds is typically a mutual fund that invests in other mutual funds. The two terms are often used interchangeably depending on the industry.
A fund-of-funds offers institutional investors the benefits of efficiency, effectiveness, and business risk diversification. Similarly, a manager-of-managers provides access to emerging investment talent in a disciplined, risk-controlled manner. The process of identifying and funding nascent firms can be consuming for an investor’s staff, as it requires on-site visits and ongoing calls with the managers hired. If the relationship sours, terminating a manager also could create unwanted publicity.
Since 2002, our entire organization has been aligned behind one mission: achieving client objectives and delivering superior service through the application and continued refinement of a disciplined and comprehensive process. This mission is also a cornerstone of our business philosophy. Additionally, because we are seasoned industry professionals who have built our firm from the ground up, we fully understand both the challenges facing a new business, and the complex and rapidly changing investment management industry.
Using our firm as an example, we have seen that the employee-ownership structure fosters stability and accountability while incentivizing outperformance, as those with a stake in the future of a company work harder to build it. We also believe ownership and the possibility of ownership sharpen the skills required for superior investment returns, such as innovation, entrepreneurship and the drive to succeed.
There are popular misconceptions regarding fees for a fund-of-funds and a manager of managers, e.g., fees are higher than for a standalone manager. We welcome the opportunity to discuss our simple and transparent fee structure with you. To arrange an appointment, please call or write us at 415-825-0616 or firstname.lastname@example.org.
We use a wide range of resources, including strong industry relationships, existing emerging managers, investment professionals leaving their current sponsors, and organizations such as the Robert Toigo Foundation and the NEPC. The latter engages with organizations such as the National Association of Security Professionals, which supports minority- and women-owned firms. Additionally, we engage with the boutique and emerging manager community by sponsoring and participating in events and conferences.
Everyone at Bivium is accountable for ensuring that client expectations are met. Our investment and compliance/operations teams work together in ensuring that client portfolios meet all objectives. Portfolios are monitored constantly and are formally reviewed on a quarterly basis by the entire team.
Bivium does not currently manage socially responsible portfolios for our clients. We do, however, provide detailed reporting on socially responsible risk factor analysis for several clients. We are open to discussing our capabilities in building a socially responsible portfolio with interested prospective clients.
Bivium rigorously monitors our managers to assess both investment and business risk. A variety of risk reviews are conducted on managers daily, weekly, monthly and quarterly. We carefully monitor each manager’s portfolio for compliance with investment guidelines and adherence to any social restrictions. Our due diligence process at the time of hire, and as part of our review process, includes a thorough review of the compliance, operations and business risk of our managers. We work proactively with managers where we perceive an increase in business and/or investment risk and will act quickly if we become uncomfortable with the risk.
We blend top-quartile managers synergistically into broadly diversified, risk-managed portfolios designed to meet our clients’ precise objectives. For example, we run portfolio optimizations and stress tests on the aggregate portfolios to evaluate excess return expectations, risk levels, and return correlations. Importantly, we take a forward-looking approach to portfolio construction and incorporate our insights with regard to future alpha and investment risk. For more, please see the Portfolio Management section on our Process page.
Yes, the firm is majority employee owned.
Yes, Bivium’s principals meet that criterion.
Our partners have come to generally understand such managers as those with under $2 billion in total AUM. We consider managers to be emerging if they are newly established firms, team lift-outs, new products or teams at established firms, and/or firms beginning their marketing effort to the institutional marketplace.
Since our inception in 2002, we have been exclusively focused on providing manager-of-manager services in asset classes where we believe smaller, emerging managers have an advantage versus larger money managers. The majority of our assets are in small cap mandates, an inefficient asset class where substantial value can be added through the use of emerging and boutique managers. From our origins as a small cap specialist, we have expanded our research efforts and product offerings to include exposure across asset classes while adhering to our focus on smaller, emerging managers and areas of inefficiency.
No. Currently we exclusivly manage traditional long-only products. However, we are open to discussing Bivium’s capabilities in structuring products in the alternatives space with prospective clients.
Yes, Bivium is a registered investment adviser under the Investment Advisory Act of 1940.
We currently only follow emerging managers, but our experienced investment professionals have, on average, almost two decades of experience following managers of all sizes across asset classes. We are open to structuring multi- manager portfolios outside of the emerging manager space for interested prospective clients.
The depth of our resources and experience enables us to conduct extensive assessment of the firms and their principals. The additional time we employ often benefits the managers, as our scrutiny and constructive feedback leads them to reflect on their business plans and how they can grow more efficiently and effectively. In addition, IT, operational, and strategic challenges, along with the volume of regulatory change, pose considerable cost and risk to nascent firms. We are well positioned to assist with resources and insight in those areas, and we are dedicated to helping the managers on our platform adapt to the industry’s complex and ever-shifting regulatory landscape.
We provide guidance and practical advice during all phases of a firm’s lifecycle, helping newly formed partnerships to build a business structure that is transparent, sustainable, and robust. An important distinguishing feature of the Bivium platform is that we also tend to fund early in a manager’s lifecycle and provide meaningful allocations.
The first step in the extensive process is to submit the introductory Investment Manager Questionnaire found in the Prospective Managers section. Due diligence is then performed on the managers selected (e.g. conference calls, onsite meetings and in-depth portfolio analysis).
Please submit the introductory Investment Manager Questionnaire found in the Prospective Managers section of our website. We will review the material submitted and contact you if there is a fit.
Due diligence typically takes six to nine months. In later stages of the due diligence process, selected managers undergo in-depth review by Bivium’s Investment and Compliance Committees and are subject to ongoing onsite investment and operational due diligence visits.
Since our inception in 2002, Bivium has been exclusively focused on providing manager-of-manager services in asset classes where we believe smaller, emerging managers have an advantage versus larger money managers. The majority of our assets are in small cap mandates, an inefficient asset class where substantialvalue can be added through the use of emerging managers. From our origins as a small cap specialist, we have expanded our research efforts and product offerings to include exposure across asset classes while adhering to our focus on smaller, emerging managers and areas of inefficiency.
No. Currently we exclusively manage traditional long-only products. However, we are open to discussing our capabilities in structuring products in the alternatives space with prospective clients.
No. We seek top-tier investment firms managing smaller pools of assets. Period. Our sole focus is on constructing portfolios that generate superior risk-adjusted returns for our clients. Manager selection is based in large part on the investment firm’s demonstrated ability to deliver consistent outperformance. However, if a client requests MWBE exposure and geographic preferences, we leverage our capabilities to identify talented managers in the required areas.
There is no minimum track record or assets under management requirements. Every manager is evaluated on a case-by-case basis.
We have a simple and transparent fee structure that we explain to the managers we select. It is also stated and defined explicitly in the terms and conditions agreement. In addition, we do not accept any type of fee from the emerging and boutique managers on our platform. Lastly, managers cannot pay to be in our program or database.
We do not require managers with AUM under $100 million to be registered with the SEC. However, they must be registered at the state level. Once a firm’s asset levels increase to close to $100 million, in order to continue to participate in Bivium’s manager-of-managers program, the firm must register with the SEC within the required time frame, regardless of whether it remains registered with one or more states.
Yes, Bivium Capital qualifies as a minority-owned business.
We currently only follow emerging and boutique managers, but our experienced investment professionals have, on average, almost two decades of experience following managers of all sizes across asset classes. We are open to structuring multi-manager portfolios outside of the emerging manager space for interested prospective clients.
Bivium considers managers around the world. We currently have one funded manager outside the US.