Notes from the most recent IMI Consultant Congress. Great speakers offering excellent insights.
Marketing strategies that stand out with consultants.
- Quarterly report with investment commentary
- 1-2 pages on investment that were in place at beginning of the quarter and see how the ideas played out.
- Overall idea – walk through what was the view, what was the expression of that view and how did it play out to show examples of execution of the strategy.
Client service structure second to none.
- True differentiator is to have very qualified client service people that really understand the space. To retain highly qualified people have to pay them, but right now, most of the money goes to pm and sales.
Transparency of investment process
- Keep it simple stupid.
- Quant meltdown of 2007 – Conference calls meeting in person, share the analysis, sharing the research that was being done in the portfolio.
- Tough time when clients are managing more and more transparency.
Not going to be the asset management firms with the best performance that is going to win. Looking for a full suite of services and high quality service.
There are about 25 clients per consultant. More time or less time really understanding the money manager. Majority of inbound is inquiry specific, but on the product side. How can you help me manage my portfolios better.
How to build value with consultants?
Build on first good meeting.
What is the business plan?
During the first meeting give a good basic overview of the firm. What is the growth strategies?
Then focus on one strategy.
- What do you really believe. What are your true convictions?
Then talk about performance.
- What type of environments you do well. What type of environments we don’t do well.
Position firm as a resource.
- Provide research. Help educate us.
- Market commentary would be helpful.
- Consultants read whatever is sent – read their commentaries. GMO, Howard Marx at Oaktree – Pimco
Target consultants that fit your firm.
- Understand the consultant philosophy
- Recognize that the research group is where you begin– respect the analyst. Understanding the important people in the process is critical.
Getting consultants to pick your firm.
- Final presentations – Marketing, branding, differentiation,
- Demonstrate sustainability
- Justify the fees
Challenges when reviewing managers
- time – have very little of it
- Don’t waste time – make interaction efficient.
- Determining key personnel
- Onsite meeting – must have access to the entire team.
- Good accurate performance attribution – what’s working well what’s not working well.
Attributes that we seek?
- Conviction – stick to style when times are tough.
- Consistency – performance, team members, etc.
- Pragmatism – understand the niche
- Investment culture – org structure, compensation culture.
- Investment decisions ahead of business decisions.
- Risk controls – passion con
Dos and don’ts
- Don’t lead with performance
- Not hottest performers
- PM – do not discuss every holding
- Don’t rely on the past to explain the future. How are you going to sustain going forward.Do
Explain the investment process