Aksia

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.”

—Sage Um