Founder's Story: The Brutal Truth About Starting a Fund—And Why Most Don’t Make It | Ep 244 with Patrick William, Founder of Rixon Capital
Release Date: August 1, 2025
Introduction
In Episode 244 of “Founder’s Story” by IBH Media, host Daniel engages in a candid conversation with Patrick William, the founder of Rixon Capital. The episode delves into the intricate realities of launching and managing a financial fund, uncovering the challenges, strategies, and personal journeys that define successful entrepreneurship in the financial sector.
Challenges of Starting a Fund
Patrick William opens up about the initial hurdles faced when starting Rixon Capital. He emphasizes that while having a stellar product, niche, and compelling story is crucial, raising capital often proves to be the most daunting task.
Patrick (00:12): “The biggest challenge... is how difficult it is to raise money because you focus on one, which is product... you forget there's another engine that needs to run which is actually raising money.”
Patrick contrasts two approaches to fund-raising: partnering with large family offices or institutional funds versus the grassroots method they adopted. Rixon Capital chose the latter, starting with a modest $3 million raise in October 2022 and gradually building credibility and investor trust over time.
Patrick (00:54): “We did it the hard way. So we got a group of motivated people together... and then I just started cold calling that. We started with $3 million... but gradually... investors begin to recognize... they can see the results.”
Fund Management and Revenue Streams
The discussion shifts to how fund managers earn their income, highlighting two primary revenue streams: management fees and performance fees.
Patrick (01:42): “The first, which is the most substantial, is the management fee... we do 1.5%... if we had a hundred million dollar fund at 1.5%, it's one and a half million dollars a year in revenue.”
Additionally, performance fees are contingent on outperforming set benchmarks, typically constituting 20% of the excess returns.
Patrick (02:20): “Performance FEES are generally 20% of the outperformance. So we, if we're getting paid a performance fee, we burned it.”
Deployment of Funds and Risk Management
Patrick outlines Rixon Capital’s meticulous approach to deploying funds, which involves adhering to a strict rule book and leveraging a senior credit underwriting team to assess potential investments.
Patrick (02:36): “We use what we call information memorandum... all our loans must be first ranking, senior secured, tangible asset backed and pay monthly cash interest.”
An independent investment committee plays a critical role in scrutinizing each potential borrower, ensuring thorough evaluation before any funding decision.
Patrick (03:29): “They basically beat us up over an hour and a half to make sure we considered all the pros and cons... and then we fund the loan.”
Starting a Fund Today: Focus on AI and Due Diligence
When asked about starting a fund in emerging sectors like AI, Patrick emphasizes the importance of due diligence and delegation.
Patrick (03:50): “Let me have the sleepless nights for you because... you pay me a 1% management fee. I do the work. I've got a team that is exceptional at doing this.”
He advocates for diversification across multiple positions to mitigate risks, providing investors with substantial benefits in return for modest fees.
Fundraising Landscape Changes with Technology
Discussing the impact of technology on fundraising, Patrick acknowledges the role of AI and digital tools in streamlining back-office operations but underscores the irreplaceable value of human relationships in attracting investors.
Patrick (05:26): “Investors want to see a face, shake a hand, have a conversation... AI... helps with the back office stuff... but relationship building... has a lot of value.”
Patrick William’s Personal Journey
Patrick shares his personal and professional journey from Malaysia to Australia, detailing his transition from working at Macquarie Capital in mergers and acquisitions to founding Rixon Capital. He highlights cultural and taxation differences that influenced his strategic decisions.
Patrick (06:14): “I moved from Malaysia to Australia to go to university... worked in M and A for another 10 to 12 years... set up a funds management business and that's when I made the transition.”
Investment Opportunities in Asia Pacific and Southeast Asia
Focusing on the Asia Pacific region, Patrick identifies significant opportunities due to the robust entrepreneurial activities and the substantial capital available for investment.
Patrick (09:04): “Raise capital from Asia because... there's a lot of money in that market... something boring, safe and income generating. And that's where you should come.”
He discusses tailored investment allocations based on investors' life stages, with higher allocations for those nearing retirement seeking stable income.
Patrick (09:45): “If you're closer to retirement, we'd get close to 50 to 75% of someone's portfolio... the median investment is half a million dollars. So that generate... $5 to $6,000 of monthly income with our fund.”
Entrepreneurial Traits and Persistence
Patrick emphasizes the critical role of self-belief and unwavering commitment in entrepreneurial success. Drawing parallels to historical figures, he illustrates the importance of having no fallback options to maintain focus and resilience.
Patrick (11:17): “If you believe in yourself and you believe in what you're going to do and you stick with it... you'll come good.”
He recounts the strategy of “burning the boats,” ensuring there is no Plan B, which fosters laser-focused determination.
Patrick (12:18): “That's exactly how we built the fund. There was no plan B. So it was going to succeed or it was not... you'll stick with it and... it will work.”
Raising Capital and Investment Allocation Strategies
Patrick discusses effective strategies for allocating investments within portfolios, tailored to the investor’s stage in life. He underscores the attractiveness of asset-backed strategies for providing steady income, appealing especially to those seeking safer investment avenues.
Patrick (10:23): “Some investors say... pays for private school fees. We've got one investor... it pays for her Maserati list.”
Final Thoughts and Contact Information
As the conversation wraps up, Patrick reinforces the personal touch Rixon Capital offers, inviting potential investors to reach out directly for personalized consultations.
Patrick (14:52): “Our webpage is a great starting point. So it's Rixon Capital... all our details available. I'm the founder and managing director... a very personalized, which we like.”
Daniel appreciates Patrick’s insights and contributions, highlighting the importance of distinct personal branding in entrepreneurship.
Daniel (15:18): “Rickson Capital. You have what I would say rated number one mustache of 2025... I really enjoyed the conversation, learned a lot.”
Conclusion
Patrick William’s candid discussion provides invaluable insights into the complexities of starting and managing a financial fund. From the strenuous process of raising capital independently to the strategic deployment of funds and the indispensable traits of successful entrepreneurs, this episode offers a comprehensive understanding for aspiring fund managers and entrepreneurs alike.
For more information about Patrick William and Rixon Capital, visit their website at Rixon Capital.
Notable Quotes:
- Patrick (00:12): “...raising money is actually the hardest part when you're starting a brand new fund.”
- Patrick (01:42): “...we do 1.5%, but it can range from 0.5 to a few percent of all the funds under management.”
- Patrick (05:26): “...AI helps with the back office stuff, but relationship building... has a lot of value.”
- Patrick (11:17): “If you believe in yourself... you'll come good.”
- Patrick (12:18): “...there was no plan B. So it was going to succeed or it was not...”