In our experience engaging with managers, when mandates are lost it’s often not the messaging nor the messenger that needs changing. Managers generally do well enough in articulating their story, particularly after some pitch training and content development. Their business development resources also are typically on point. Perhaps it’s the fit that needs further consideration Getting in front of institutions is important and the process is not brief. Therefore, it is unrealistic to think that all institutional opportunities will end with capital allocations. However, where business development professionals and the managers they serve can do a better job is in the vetting of prospects and prospects’ interests ahead of time.
Is your product a fit? To improve the chances of success in the institutional market, addressing the following six ‘fit’ questions will help create more focus, improve the odds of mandate consideration, and may even provide some necessary product enhancement opportunities.
Is your product a fit? To improve the chances of success in the institutional market, addressing the following six ‘fit’ questions will help create more focus, improve the odds of mandate consideration, and may even provide some necessary product enhancement opportunities.
Channel
Is my product best suited for institutions or intermediaries?
Are family offices or independent wealth advisors more likely to be interested?
Do we have the right channel contacts to get in front of the right resources?
Maturity
Does the offering have the track record required by the prospect(s)?
Does the firm have the team in place to service the prospect(s)?
Does the investment story demonstrate the prospect’s expectations for performance and process in the relevant asset class?
Terms
Are fees within the mid-range or lower within the peer group?
Is the structure a good fit for the prospect(s)?
Are the minimums viable for the prospect(s)?
Is the liquidity profile viable for the prospect(s)?
Are there attributes of the product (tax management, turnover) that make it more/less viable for the prospect(s)?
Timing
Is the manager attempting to be first to market with a new idea, and thus serving in the role of educator? Is the market ready for the new idea?
Is the manager entering mid-market, thus being considered as part of a portfolio and/or as a complement to another solution where correlation is critical?
Is the manager late to the market, finding only replacement opportunities?
Demand
Is the asset class in demand?
Are there capacity constraints requiring more or less managers to allocate to?
Is the strategy complementary to a trending allocation approach?
Investment
Does the strategy incorporate elements that do not meet prospects’ guidelines such as leverage, concentration, high levels of turnover?
