Bridger Pennington, the founder of Black Bridge Holdings, shares his secrets to building and scaling investment funds. In this book, he also shares his personal story and warns of the risk involved in investing in hedge funds. This book is a must-read for anyone interested in building a hedge fund.
Bridger Pennington is the founder of Black Bridge Holdings
Bridger Pennington is the founder of the debt fund Black Bridge Capital. His fund has done over 230 debt deals in the last two years. In addition to running the fund, Bridger hosts a podcast called Investment Fund Secrets. His goal is to help other people start investment funds without having to have an Ivy League degree or any Wall Street connections. The podcast can be found on Apple Podcasts, Spotify, and Google Play.
Before creating a fund, entrepreneurs had a hard time. A ton of paperwork and requirements would have hampered the process. However, today, almost anyone can start their own fund. In this podcast, Bridger Pennington shares his experience creating a fund, its risks, and the challenges he faces.
He teaches others how to build and scale investment funds
A team managing your investment fund is an important aspect of building a successful fund. Although the idea is to hire a team with a wealth of experience and knowledge, you will also need to build your own team of people. However, a fund with only $100 million in AUM will barely be able to hire a team, let alone pay the salaries of investment professionals.
In addition, overhead and compliance expenses will eat up your management fees. For this reason, you will need to build your team around the fund’s needs. If the fund is value-oriented, you will likely start small with one or two investment professionals and an administrative/operational/marketing person.
Bridger shares his success story
Bridger has been interviewing investors and raising money for his fund since 2014. He has raised anywhere from $46,000 to $49,000 and has raised a total of up to $75 million. His fundraising has been a series of daily improvements and baby steps. Today, he is making millions of dollars and teaching others how to do the same.
As a college student, he tried to start a business and was not very successful at it. He eventually turned to a financial advisor who taught him the basics of investment management. He explains that long-term improvement and having a good mentor are the keys to a successful investment fund. He also provides tips on investing your money and building an extensive portfolio. For example, he suggests finding partners who can compensate for your weaknesses. He also shows that your weaknesses can be your strengths in certain ways.
He explains the risk of investing in hedge funds
There are several risks associated with hedge funds. They can be more volatile than mutual funds, and investors may have to lock their money up for years. In addition, hedge funds often use leverage and borrow money, which can turn minor losses into significant ones. For example, let’s say you invest in a hedge fund that invests anywhere in the world. In addition to investing with borrowed money, the fund may use derivatives to reduce its risks.
Hedge funds do not have a standardized framework like traditional retail funds, so it is important to read the fine print and understand how the fund works. Fortunately, most of these risks apply to individual funds and highlight the need for diversification and due diligence. While the risks of hedge funds are higher than traditional investments, they can make them more difficult to sell.
Investors should remember that hedge funds have historically underperformed broader market indices. However, they are an option for accredited investors who want to diversify their portfolios and hedge against volatility. For the average investor, it is better to invest in index funds tracking major indices like the S&P 500.
