The Leap to Launch: What It Really Takes to Start an Investment Fund
By David Proskin
Launching an investment fund is one of the most exhilarating and intimidating decisions an investment professional can make. Whether you are a seasoned portfolio manager or a newly minted CFA convinced you have an edge, the process begins long before legal documents and pitch decks. It starts with honest self-reflection.
Understanding why you want to launch is foundational. Motivations such as autonomy, entrepreneurship, legacy-building, or altruism quietly shape every decision that follows, from risk tolerance to investor communication, and determine how you respond when inevitable challenges arise.
While most aspiring fund managers bring strong analytical and portfolio management skills, launching a fund also means launching a business. One of the earliest and most critical tasks is articulating your “edge.” Investors expect a clear and confident explanation of what differentiates you in an increasingly crowded market. This requires precision without bravado and conviction without overstatement.
Equally important is identifying your investor base, both at launch and over time. Early capital often comes from personal savings or friends and family, while institutional investors typically follow later. Each group brings different expectations around liquidity, time horizon, reporting, and fees. These dynamics directly influence fund terms and your negotiating flexibility as the business grows.
Cost planning is another essential discipline. Budgets should be conservative and anchored in recurring revenue, usually management fees, since performance fees are never guaranteed. Clear boundaries must also be drawn between expenses borne by the fund and those absorbed by the management company, an area of close investor scrutiny. Portfolio-related costs may be charged to the fund, while compliance, accounting, and infrastructure typically fall to the management company.
Team structure and operational resilience deserve early attention. Whether launching solo or with partners, investors will assess key-person risk, succession planning, and asset protection safeguards. Defining roles, ownership, compensation, and decision-making authority early, while relationships are strong, is far easier than renegotiating later. Long-term tax, estate, and succession considerations should also be addressed while the organization is still small.
Professional advisors are indispensable. A specialized fund attorney is often the first hire, followed by tax advisors who help design efficient structures. Today, an independent fund administrator is considered essential, providing official records, investor servicing, and oversight. Prime brokers and technology providers must also be chosen carefully to support trading, security, and scalability.
Ultimately, responsibility for the fund rests squarely with the manager. Risks can be mitigated through strong controls, insurance, and reputable partners, but they cannot be delegated away. Transparent communication, especially when mistakes occur, often determines whether setbacks remain temporary or become reputationally damaging.
Launching a fund is a leap. With clarity, discipline, and the right foundation, it can also become a defining career achievement.
David Proskin
Managing Director
Integrated Solutions
Integrated Solutions℠ provides professional services to the financial services sector and other small mid-sized businesses both in the United States and Internationally. We specialize in advising broker-dealers, investment advisers, commodities firms, and other entities regulated by the Securities and Exchange Commission, FINRA and other regulators in the United States, as well as the Financial Conduct Authority in the United Kingdom. We provide fund administration services to hedge funds, fund of hedge funds, private equity firms and family offices. We also provide services to companies in real estate, entertainment, and other industries. We endeavor to offer a highly tailored, customized product designed to facilitate Senior Client Management to focus on what they do best.
