The following post is courtesy of Diane Harrison who is principal and owner of Panegyric Marketing, a strategic marketing communications firm founded in 2002 specializing in alternative assets.
One of the common education points I stress when working with any of my clients, be it a new fund or a growing established group, is the importance of clarity to investors. In all aspects of communication, driving the key message with a minimum of distractions makes the delivery of your intent that much stronger.
I can liken this goal to observing different styles of houses when home shopping. One of my favorite styles of building is post and beam construction, where the inner working of how a building holds together is fully exposed. Rafters and joinery tell the story to the eye of what supports what and how space is created from its various overlaid structures. I compare this to exposing the solid construction of your business through concise communication to give investors confidence in the practice and process you are building.
Contrast the post and beam analogy to a fussy, overdressed home, where walls are concealed with furniture and pictures, windows are covered with layers of drapery, and floors are overlaid with plush carpet. Who knows what lurks beneath those coverings? Only a home demolition will reveal whether the home’s structure is intact and solid.
So let’s apply the post and beam transparency example to some of the areas that you, as a business owner, can deliver this communication benefit to your existing and future investors.
KEY TEAM MEMBERS:
Every investment business has several principal roles that are crucial to the wellbeing of its ongoing success. Helping investors understand who these individuals are and how they came to fill their key roles is essential in building an understanding of your business’s quality and desirableness to investors. Functional organization charts, biographical summaries, and perhaps some webcasts or other media clips showcasing the knowledge and experience of these people are good ways to showcase their value and current role in the organization.
If any of these individuals also has a presence within the wider investment industry as a thought leader, creating a library of these examples is also useful. A company website is the best vehicle to house this information, but it will also find its way into other communication and marketing collateral as well.
THE INVESTMENT AND OPERATIONAL PROCESSES:
From idea generation to research and analysis, then to investment selection and monitoring, including risk management, every fund manager understands the critical nature of getting this value described effectively to clients and prospects. While most fund managers are adept at being able to bring these elements to life in front of investors, there is a long lead process of prospecting and marketing that precedes this type of one-on-one meeting, and therefore several communication vehicles need to be available to the individuals who are tasked with the lead generation and prospecting that comes first.
A similar commitment needs to be made to showcasing the time and attention that has gone into creating the managerial and operational infrastructure upon which every fund business relies. Current systems and future planning for scalable growth will tell the tale of how the fund plans to handle increased assets and maintain tight focus on operational controls.
Investing in the creation of multiple ways to demonstrate this information, verbally, with graphic flow supplements, and similar, is a critical time and financial investment every fund manager should devote resources to, be it in-house if qualified, or with external partners to provide the best level of achievement for a fund business at any stage of its life.
SCALABILITY/REGULATORY COMPLIANCE/AUDIT AND ACCOUNTING:
Unless your business has crested the multi-billion AUM level, the most likely avenue to assure that all essential financial and legal controls are up to date and in compliance in the areas in which the business operates, lies in selecting the right outside partners to provide these services. Use the highest quality service providers your company can afford, and the credibility and client comfort they enjoy will help convey to your new fund business as well.
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