Typically, a fund manager needs at least $25M of FUM just to breakeven.
Investors and regulators usually require a proven track record before they will provide funds or licenses. But for smaller managers this is often a 'Catch 22': without operating a fund for many years, how can they develop a proven track record?
It is always harder, and takes longer, to raise FUM than investors initial discussions suggest.
Without years of experience, it is often hard to have the confidence to stick to a clear strategy in the face of market movements.