Tough Time to Launch a Mutual Fund

Entrepreneurs will find it extremely difficult to start mutual funds, according to Peter Thompson, ’00. Mutual funds are under enormous scrutiny right now, he said, pointing to the fallout from recent market scandals and the resulting investigations. Its hard to imagine starting up a mutual fund in this environment. With the high costs of enhanced reporting and regulation, theres little opportunity for entrepreneurship.

Thompson, ’00, executive vice president of Ariel Capital Management , was among featured speakers at a program hosted by the University of Chicago Club of Metropolitan Chicago November 18 for alumni interested in learning the difference between investment banks, equities research firms, and hedge funds.

Mutual fund entrepreneurs like John Templeton would not have been able to start their businesses today, Thompson said, estimating that it would take as much as $1 billion in assets to launch a mutual fund today.

Ariel Capital Management, an $18 billion investment management firm, is headquartered in Chicago.

 

Phil Britt