Frequently Asked Questions
Find answers to the most queried aspects of our investment programs.
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 interest, broader and deeper company access, and early introductions to the investment industry’s rising stars.
Like standalone managers, a manager-of-managers is a registered investment adviser with the discretion to construct portfolios within clients’ pre-determined investment guidelines. However, a manager-of-managers builds active portfolios of managers—through due diligence, selection, active management, and monitoring—in the same way a standalone manager builds portfolios of stocks and bonds. As a fiduciary, the manager-of-managers 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. Within institutional asset management, the term fund-of-funds is also frequently associated with hedge fund managers and private equity strategies that select and invest in other hedge or private funds. The two terms may be used interchangeably, depending on the industry. However, the fee model associated with each term represents an important distinction that is often misunderstood. Public markets manager-of-managers typically work under a shared fee model versus a fee-on-fee model, making it an economical choice for investors.
These multi-manager structures offer institutional investors the benefit of efficient and effective allocation of assets and help mitigate investment and manager risk through broader diversification. More importantly, they provide access to under-represented and under-followed 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 monitoring of the managers hired. Moreover, if the relationship sours, terminating a manager may create unwanted headline risk for the client. For these reasons, multi-manager structures are practical and effective solutions for institutional investors.
Since 2002, our entire organization has been aligned behind a mission: achieving client investment 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 employee-ownership fosters stability and accountability while incentivizing outperformance, as those with a stake in a company's future work harder to sustain and build it. We also believe that ownership and the potential for ownership fuel investment innovation, entrepreneurship, and success.
There are popular misconceptions regarding fund-of-funds and manager-of-managers fees, e.g., fees are higher than standalone manager fees. Bivium’s all-in fee includes the sub-managers’ fees and is similar to fees paid to standalone managers. We welcome the opportunity to discuss our transparent and straightforward fee structure. To arrange a fee demonstration, please call or write us at 415-825-0616 or email@example.com.
We have strong, longstanding relationships across a wide range of organizations and professional networks. These include existing emerging managers, investment professionals leaving their current sponsors, and organizations such as the Robert Toigo Foundation, National Association of Securities Professionals (NASP), Asian American Association of Investment Managers (AAAIM), New America Alliance (NAA), National Association of Investment Companies (NAIC) and 100 Women in Finance (100WF), all of which support minority- and women-owned firms. Additionally, we engage with the boutique and diverse 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 to ensure that our clients’ portfolios meet their objectives. Portfolios are monitored constantly and are formally reviewed quarterly by the entire team.
Yes, Bivium manages socially responsible portfolios for its clients and provides detailed reporting on socially responsible risk factor analysis. We welcome the opportunity to discuss our capabilities in this area, which include ESG, SRI, DEI and Impact themed strategies, with existing and prospective clients.
Bivium rigorously monitors managers to assess both investment and business risk. We conduct a variety of risk reviews on managers daily, weekly, monthly, and quarterly, carefully monitoring each manager's portfolio for compliance with investment guidelines and adherence to any social or environmental restrictions. Our due diligence process at the time of hire, and as part of the ongoing review process, includes a thorough review of managers' compliance, operations, and business risk. We work proactively with managers where we perceive atypical business or investment risk exists and act swiftly if we become uncomfortable with a specific type or level of risk.
We blend managers synergistically into broadly diversified, risk-managed portfolios designed to meet our clients’ specific objectives. For example, we run portfolio optimizations and stress tests on the aggregate portfolios to evaluate excess return expectations, risk levels, and return correlations. Moreover, we take a forward-looking approach to portfolio construction, incorporating our insights regarding alpha and investment risk. For more information on our portfolio construction process, please see the Portfolio Management section on our Investment Process page.
Bivium is 100% employee-owned and operated.
Bivium is 100% minority-owned and operated, certified by the Western Regional Minority Supplier Development Council (WRMSDC), an affiliate of the National Minority Supplier Development Council (NMSDC).
Managers are generally defined as those with <$5 billion in total AUM. Under this broad definition we will also consider newly formed firms, team lift-outs and teams within established firms, new products at existing or larger firms, or firms that are simply new to the institutional marketplace.
Since our inception in 2002, our exclusive focus has been providing our clients access to managers in asset classes where we believe smaller and newer firms have an advantage over larger money managers. We look for inefficient asset classes where these firms and their unique strategies can add value. From our beginnings as a small-cap specialist, through our expansion into a fully Outsourced Chief Investment Officer (OCIO), we have expanded our research efforts and product offerings to include exposure across all asset classes while adhering to our focus on smaller, newer managers in inefficient areas of the market. Please see a full list of products, strategies and asset classes here.
Bivium works with its clients to determine which products will help them achieve their investment goals. These include traditional long-only equities, fixed income, and alternative investment products.
Yes, Bivium is a Registered Investment Adviser under the Investment Advisers Act of 1940. We also require our managers to either be SEC registered or registered with their state’s securities regulator.
While most of the managers we follow are emerging/boutique managers (diverse, women-owned, smaller, or newer), our investment professionals have, on average, over 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 prospective clients.
The depth of our experience and resources enables us to conduct extensive assessments of the firms and their principals. The additional time we employ often benefits the managers, as our scrutiny and constructive feedback lead them to reflect on their business plans and how they might achieve more efficient and effective growth. In addition, growing technological, operational, and strategic challenges, along with the volume of regulatory change, pose considerable financial and business risk to nascent firms. We are well positioned to assist with resources and insights, and are dedicated to helping the managers adapt to the industry’s complex and ever-shifting regulatory landscape.
We offer guidance and practical advice during all phases of a firm’s lifecycle, helping newly formed firms build sustainable, robust, and transparent businesses. A distinguishing feature of the Bivium platform is its tendency to fund early in a manager’s lifecycle, providing meaningful allocations that fuel growth.
Managers begin the extensive vetting process by first completing our Introductory Investment Manager Questionnaire, which is found in the Prospective Managers section of our site. We then prioritize manager and strategy due diligence based on 1) our sourcing needs and 2) our review of the initial questionnaire. Managers selected for in-depth evaluations undergo a multi-layered, rigorous due diligence process that scrutinizes all aspects of the firm, team, process, and investment performance. Due diligence meetings are conducted via conference call, Zoom, onsite/in-person (at the managers’ and Bivium’s offices), and with in-depth portfolio analysis. We are eager to identify and fund talented new managers, but due diligence is a lengthy and rigorous process, so it is important to manage expectations.
Firms that wish to be included in Bivium’s database should complete the Introductory Investment Manager Questionnaire found in the Prospective Managers section of our website. Our team will review your material and contact you if there is a fit.
Due diligence typically takes six to nine months; it may take slightly less time for immediate opportunities within our portfolios. In later stages of the due diligence process, selected managers undergo an in-depth review by Bivium’s Investment and Compliance Committees and are subject to ongoing investment and operational onsite due diligence visits.
Since our inception in 2002, our exclusive focus has been providing our clients access to managers in asset classes where we believe smaller and newer firms have an advantage over larger money managers. We look for inefficient asset classes where these firms and their unique strategies can add value. From our beginnings as a small-cap specialist, through our expansion into a fully Outsourced Chief Investment Officer (OCIO), we have expanded our research efforts and product offerings to include exposure across all asset classes while adhering to our focus on smaller, newer managers in inefficient areas of the market. Please see a full list of asset classes here.
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 AUM requirements. Every manager is evaluated on a case-by-case basis.
We have a transparent and straightforward fee structure that we explain to the managers we select. It is also stated and defined explicitly in the terms and conditions of the Investment Management Agreement (IMA). In addition, we do not accept any type of compensation from prospective or funded managers. Lastly, managers cannot pay to be in our program or database.
Managers with AUM < $100 million are not required to register with the SEC; however, they must be registered at the state level. When a firm’s AUM approaches $100 million, the firm must register with the SEC within the required time frame in order to continue to participate on Bivium’s platform, whether or not the firm remains registered with one or more states.
Yes. Bivium is 100% minority-owned and operated, certified by the Western Regional Minority Supplier Development Council (WRMSDC), an affiliate of the National Minority Supplier Development Council (NMSDC).
While most of the managers we follow are emerging/boutique managers (smaller and newer), our investment professionals have, on average, over 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 existing and prospective clients.
Bivium considers managers around the world. We currently have several funded managers outside the U.S.