Industries such as manufacturing, textile, and others have been running for centuries—this has helped them to sustain through various transformations. On the contrary, the Fund advisory and Administration industry are still relatively new and in most cases privately-held. Recently it has transitioned from being an internal department within the fund manager where it is a non-revenue generating business unit to an external service provider. With driving the value and investment in technology and systems, the industry has grown and it’s a little bit fragmented now so there are the big players, however, as more and more fund managers enter the market, there is an opportunity for fund administrators to really serve the emerging manager.
“So, in serving the emerging manager, you have to do a little more than what the big guys know how to do…there is a little bit more “hand-holding”, there is a lot more consulting, and by offering both CFO services and fund administration, I’m really able to bridge the gap and add value. I’ve also invested heavily in technology, and in doing so, been able to streamline our operations and do things at a very reasonable cost to the ultimate customer, the fund manager,” states Ken Aseme, Founder & CEO at Hazic Investments.
The idea of Hazic Investment came when Ken was working at the largest fund administrator and was not being able to service the smaller clients. Generally, smaller clients are the ones who need the most help and the same was felt by Ken. So, after leaving, he decided to set up Hazic and was able to work with a handful of smaller clients who were underserved in the community because of the perception and the dollars that they bring in. With Hazic, Ken was able to help those clients grow and work with them through their pain points, through their first fund, and able to establish a rapport and a relationship that has now grown together and that has been really lucrative. Sharing his experience, Ken says, “So, how things looked when I first started versus how they look now, like most businesses, most small businesses evolve, so we’ve added different services like the CFO services which has been really well received.”
Hazic has also changed a lot of things and how it does things and its pricing structure to be more unique and better for smaller/emerging managers who are trying to cut their teeth and manage expenses. The company also has a higher-touch model than was initially contemplated. This higher tough model means helping the manager with the full suite of services, so really understanding their needs, helping them with vendor selection, helping them with what auditor to use, who’s the right person. Hazic assists the companies with the infrastructure to work with some of the larger players in the industry and develop them to continue the growth in the business.
As more and more smaller managers are entering the market, Fund CFO and Fund Controller have been a growing part of the business. These new fund managers offer services at a smaller dollar amount attracting a lot of people to start funds. This creates a real need for knowledge and the know-how to do it. Acknowledging this issue, Hazic has used the business model offering them the help that they need and at a reasonable cost to their fund. This means spending a significant amount of time learning what’s best, selecting vendors, working closely with the vendors to cap the learning, and keeping those best practices that the company has established and put them over all of its clients. There is an investment of time on Hazic’s part that all clients benefit from and that has been a very good business model.
Fund administration is about increasing the accuracy and timing. There are two main things to consider—to have enough coverage and to have the right systems in place to be able to do things quickly and at a reasonable cost and in great timing for the LPs. Hazic has worked hard with all the members of the team, with all the pieces of the puzzle to put it in the right position to do this. The company uses the best fund administration systems that do a lot of the work for the client and is implemented to work with the fund manager on the front end so it’s early as when it’s just a concept before they’ve written a PPM to put them in the best position to be successful.
The Rolling fund is a new concept that is just developing. As a CFO of one of the largest rolling funds on Angel List, it puts Ken in a very strong position to help the fund managers as he has worked through a lot of the problems and he is a pioneer in this space. Ken and the team have worked with multiple funds in this area so it can add value on day one and show how to set things up. This is a new area that Hazic has spent years developing so when it competes with other fund administrators in this space. The company has already figured out a lot of the problems and has taken out a lot of the stress with starting a rolling fund and maintaining it.
Challenges and rewards are part and parcel of any company. Generally, the most challenging time in the startup is probably the first day when it has no clients. “You’ve got all the knowledge and you don’t have any clients. So, it was the realization that as a small business owner, you have to be empathetic to the other small business owners that you’re working with and understand what they’re going through. So, you get out there and speak to them, forge strong relationships, so people know if something goes wrong, they know how to get a hold of the business owner in order to make things happen quickly if need be,” expresses Ken. Further, he adds, “That was something that you do not learn at some of the big companies because you’re insulated by their name and if you’re an accountant, you’re really just doing accounting. When you work and you start your own company, you have to do a lot of things and therefore you can help a business owner because you understand what they’re going through and what language they’re speaking. So that is the vital thing that I had to learn very quickly and I still kind of hold that as one of the pillars of the business because when you’re working with a new manager, you can relate to what you went through when you first started.”
When the company surpasses the challenging phase of the business, it is rewarded with numerous benefits. Ken feels the most rewarding part of the journey is a bitter-sweet one, where the company had staff members leave and go on to better things, bigger companies, having helped them catapult their career. Also, the most rewarding part of it is to forge these friendships and understand where people are going. It’s also wonderful to see the fund managers grow and take that growth with them, moving from their first fund through to their fifth fund and as you see them grow and be more successful, you’re taking part in the journey in some respect.
At Hazic, Ken and his team are helping and guiding the entrepreneur. The company is sharing learning while assisting them more, so it gets lost on a longer scale with some of the larger fund administrators. As there’s a team of people doing things and they assume there’s a team of people on the other side of the fund, so if Ken had a chance, it would be to really hone that skill, to how to actually help the people within your network that are all pulling together for the same cause because the power of the network is actually more than the power of the individual.
As a prominent minority-owned company, Hazic tries its best to hire and retain the best talent and look at the talent in a different way than most people. The team at Hazic looks at talent based on the trajectory where they came from as opposed to where they are. If someone is from an underprivileged background, the fact that they even went to college speaks volumes than someone who was expected to go to college. “So, I’m looking at where they are, not when they were at 20 years old, but I’m looking at the trajectory from 15 to 20. So we really pride ourselves in working with the right people and having the right team because ultimately that is a reflection on myself and that is how I can relate… so that is kind of what we’re looking to do and it’s really worked for us. We really help develop people and launch their careers and vice versa we get excellent service and we get great people that like to come back and refer business back to us,” concludes Ken.
Ken started his career at Royal Bank of Scotland in a variety of roles, including, corporate treasury, private equity, and business banking, all in the finance department as an accountant. From there, Ken moved to UBS Bank to take on a private equity position during the market crash of 2008 to wind down some positions in their private equity book. After completing his Masters at Cambridge, Ken relocated to Los Angeles and took a role as a manager in a fund accounting group at Bank of New York Melon. After that, he was recruited to SS&C, the largest fund administrators, to help open their Los Angeles operations. After SS&C Ken moved out on his own and created Hazic Investments with some clients and relationships that he developed over the course of his career, and now Hazic exists as an independently owned fund administrator and fund CFO service business.