I received this via email last weekend:
“I came across your site online. I run a hedge fund but am always looking at other structures. I am attempting to understand how your spoke model is different then separately managed accounts (which I also have in place).”
The gist of my response was this:
“I’d say the key distinctions from the investor’s point of view are that (1) a Spoke Fund® contains the majority of the manager’s net worth (meaning in the SMA world that it’s all in one of the accounts, too) and (2) it’s run by a true fiduciary.
From the business owner’s point of view, the key difference is probably that you’re marketing it directly to the retail investor.
From the manager’s point of view, there’s probably much more in common than not.
Handful of other minor differences, but it seems those first two are the big ones – to investors, at least. And that to me is the most critical part.
Here’s a post I did a while back on the differences, too:
As per that prior post, in the end, I’d say it’s oranges and tangerines – same class, different species.