Alpha is just the beginning of the alternative investment story.

There is more to the rapidly growing hedge fund and private equity industries than absolute return. Some of the largest and most renowned firms have decades of history behind them. Moreover, many of the most successful players in the field are still led by their founding partners.

These men and women were present at the dawn of the current era of alternative investments in the 1970s and 1980s, and they have stories to tell. Theirs are the stories of unparalleled wealth creation and risk-adjusted return for institutional and individual investors around the world. And unparalleled philanthropic giving on a scale not seen since the era of Carnegie and Rockefeller.

For all their success in generating returns and managing risk, alternative investment leaders are not leveraging one of their core assets: their heritage. They have been—rightly so—putting performance and clients first over the years, managing growth and scouting new investment opportunities. They knew that there were some early files in this office or that closet. Someone was always going to get around to organizing that stuff. It was just never the right time.

Why emphasize heritage management now? Many alternative investment firms are approaching milestones that prompt them to consider their legacy. Many also want to capture their institutional knowledge for the next generation and smooth the transition to succession management.

Heritage management is a vital and often undervalued but hard-to-pin-down approach to getting the best out of your business. After 35 years in operation, History Factory still finds heritage management difficult to define in one-size-fits-all-clients terms. With that in mind, this paper explains the concept of heritage management, highlights its business relevance, and makes a case for its broader and more intentional use in the alternative investment industry.

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