Asset Management, Marketing & Accountability
For most in the industry, Marketers are second-class citizens. If you vehemently disagree, you are on the losing side… this is something we are exposed to more than most.
Some of the more common comments we hear:
- Marketers don’t have the same training. They can’t possibly fully comprehend the complexities of our investment strategy.
- If we perform the money will come.
- All we need is a good deck.
- We aren’t going to invest in marketing until we raise some capital.
- We can’t afford to spend money on marketing right now
Let’s approach these five points from a different angle.
- Marketers don’t have the same training as PM, but portfolio managers aren’t trained in the science of marketing. And if your AUM isn’t growing the way you hoped – maybe, just maybe, you should listen a little more to the marketer.
- You are performing well, fantastic. Are enough people tracking you to hit your AUM targets? More often than not the answer to this is a hard no.
- A good deck is important, however, there are typically dozens of other teams out there executing a strategy similar to yours. They have good decks too, and good websites, and good videos, and good outbound communication. Understand this, it isn’t about your performance. Allocators need to be able to justify the decision to allocate capital to you to investment committees and their peers. Do you really think a deck alone makes that easy?
- It takes money to raise money. If you disagree, good luck.
- We can’t afford to spend money on marketing. First I will refer you back to point 4. Second, more often than not, you actually can afford to spend money on marketing. You just don’t prioritize it. Do you really need 3 analysts? Instead of allocating $5 million of your own capital into the fund, perhaps it is smarter to allocate $4.5 million. Do you think you will be more successful with $5 million in the fund and no marketing, or $4.5 million into the fund, and a robust marketing program? Believe it or not, some people don’t recognize this question to be rhetorical.
The general point of all of this, asset managers are accountable for their own success, and to limp into the marketing process can be just as detrimental to that success as poor performance. The problem, when managers are fortunate enough to line up some good numbers and still fail, they tend to re-direct blame onto something other than themselves.
Perhaps the real reason why your shiny new firm didn’t achieve the AUM necessary to keep the doors open, or the fact that AUM deteriorated to the point where you had to close the doors of a 30 year old shop, was simply because you didn’t prioritize marketing. And that’s on you.
By Kyle Dunn