Jim Vos found opportunity in the midst of inefficiency. In 2006, he—and four
other co-founders—spotted an opening for a well-resourced alternatives
research and advisory firm. “We wanted to create a firm with the industrial
strengths of the largest funds-of-funds, but with the client empowerment objectives
of the top consulting firms,” he says. Ten years later, Aksia counts some of
the most sophisticated institutional investors as its clients, including Hartford
HealthCare, Sunsuper, the WK Kellogg Foundation, the New Mexico State Investment
Council, and Intermountain Healthcare.
But don’t mistake Aksia with other alternative-focused consulting firms. The
New York-based firm takes its specialist approach seriously. “We do not try to
be all things to all people, but for the investor types we were built for and the
assets we cover, we strive to be the best resourced and most diligent firm out
there,” the consulting chief says.
The firm’s coverage ranges from private credit to liquid alternative strategies—“
a lot of neighborhoods in there, but the commonality is lower betas and
higher complexity,” he adds—but on hedge funds, Vos is of one opinion: “The
industry needs to perform better.” Right away, the CEO can name three immediate
problems the industry needs to rectify–starting with high fees. While
there has been some progress to fix the issue, “it’s not enough,” Vos says. The
hedge fund industry also needs to address the asset-liability mismatch risk and
the need for less liquid fund terms, he continues. Finally, Vos takes issue with
netting, especially product proliferation where managers place those often
hidden risks with the investor—not with the manager.
It’s not just hedge funds that need improvements, according to Vos. He argues
consulting firms also need to face the scrutiny and perform better to add
value in a low-returning environment. “Consulting firms need to prove that
they are not rubber stamps or drive-through due diligence,” he explains. But
the more sophisticated investors are already aware of the criticisms and are
making moves to better service clients and add value, which could leave behind
those who aren’t able to change and adapt. “I think the investment consulting
industry will surprise people over the next 10 years,” Vos continues. “Plenty of
large asset managers and banks have tried and failed at setting up quasi-investment
consulting groups, not realizing how delicate and difficult a business it
really is. If it’s increasingly a knowledge economy with walls breaking down,
the best and most modern consulting firms should survive.”
At Aksia, Vos’ focus is still on efficiency—the firm functions with a compact
staff of 119, most of whom work in portfolio advisory and due diligence groups.
“I love the teamwork and group problem-solving across institutions,” Vos says.
“Any given workflow can involve a number of professionals at a client and
at Aksia working informally as one team and being creative. It’s just fun—I
wouldn’t want to do anything else.”