By Diane Harrison
The only thing harder than running a successful alternatives fund is launching it. Getting noticed in the crowded and naturally skeptical alternatives market can be a Herculean feat without a plan of implementation. It goes without saying that having a great investment strategy, financial backing, and well-crafted infrastructure are all critical components of a successful fund launch. Here are a few additional pointers on how to capitalize on these elements by cribbing from another cutthroat process: that of a successful book tour.
LAY SOME ADVANCE GROUNDWORK
Penny Sansevieri wrote an article on HuffingtonPost.com, Planning an Exceptional Book Signing, that reinforces the idea of book signings as more than a singular effort: …book signings are more than events, there needs to be a strategy behind them and as an author, you should be prepared to get up and talk to people. Don’t just sit there and sign—we should all be so lucky that the lines for our book are so long that we barely have time to jot down our signature in our book and move to the next fan.
Maximizing the impact of being a fresh option to the marketplace takes smart planning, whether you are a new author or a new fund manager. The first tip is creating some prior buzz. As in most efforts, timing is everything. Advance planning builds interest, which in turn creates energy and enthusiasm.
Create a media kit to help get the word spread about your fund. This could include a brief bio on each partner and investment professional in the business, a recent and professional headshot photo, a brief summary sheet on the fund offering even if no live performance has been captured yet, key contact information for both the fund and any third party representation for follow up by media personnel, and a sampling of the founder’s investment expertise, perhaps some prior published interviews, articles, research, etc. as intellectual groundwork for the new fund. More on the latter in a moment.
USE YOUR WORDS
Authors are, by definition, very comfortable expressing themselves through the written word. However, they are as prone as anyone, perhaps even more so, to succumbing to self-consciousness when required to express themselves verbally in front of those they seek to influence.
Fund managers faced with a series of introductory events and meetings as they launch their fund might adopt some suggestions offered by Kimberly Ripley in her article on writersweekly.com, Ten Tips For Tackling Book Signings And Other Helpful Hints.
- Prepare a few anecdotes or simple topics for dialogue starters with the audience. Some suggestions include current events, a short story or parable, a joke with a strong punch line, or an excerpt from an article that pertains to your market view or investment style.
- Practice your delivery in a mirror. If possible, ask someone to video-record a practice pitch. This is the best way to catch verbal or visual peculiarities you might not be aware of otherwise. Become familiar enough with your delivery to make eye contact with the audience at your event.
The in-person connection counts greatly—act authentic, in real time. Don’t become so rehearsed that you are in full recitation mode; respond to your audience and invite questions and a dialogue to develop.
THE POWER OF COMPOUNDING
Launching a book, or a fund, requires multiplication factors. Many things have to go right at the right times, and replication of success is necessary to create momentum. Some activities that can assist in multiplying positive experiences for fund managers in launching a fund are captured in Tony Levelle’s blog post on writersstore.com, 15 Do-It-Yourself Tools To Promote Your Book. Several of these suggestions are adapted here for fund managers.
Contribute to financial web forums. There are a number of alternative forums available through sites and financial news channels where managers can submit articles, participate in online dialogues, or post their commentary directly. These outlets allow managers to extend their views and voice to a greater global audience than that which they can realistically visit in person. Some of these forums are more conversational in nature, while others also house repositories of fund marketing materials specific to emerging fund managers. Investors can access these sites anonymously and become part of the discovery process of promising new fund managers.
Start a blog. Timely, consistent demonstration of a fund manager’s views on markets and developments within the alternatives industry can enhance investors’ experience of getting to know a new fund within a sector or investment style. Well-done blogs can increase traffic to a manager’s own website, promote a marketing outreach program with prospects, and be a source of educational dialogue within the industry. Speaking at conferences can augment these efforts as well, but a well-done blog can potentially have a much wider reach and offer exponentially larger returns based on its electronic global footprint and lasting presence, all at a more reasonable cost.
Record yourself. Creating a series of webcasts or podcasts to provide an interpersonal view on your approach to investment management is another affordable and effective way for managers to reach out to their prospects. Beyond the obvious advantage of being able to rehearse and reshoot each clip to optimize the delivery of these messages, these brief electronic discussions can build on a fund manager’s essential marketing message without the need to secure one-on-one investor meetings. They can be housed on the fund’s website, sent via email to prospects and clients, and used as introductions to media channels for establishing a relationship with reports as an industry thought leader.
Build a warehouse of investor recommendations. Few things influence new investors more than satisfied existing investors expressing their views about the fulfillment of a new fund’s objectives and delivery. Much as a thoughtful compendium of esteemed reviews can enhance the appeal of a new book, several well-expressed and focused investor recommendations can lend an imprimatur of success to a new fund. This is a greatly underused tactic with strong potential to help a new fund grow.
Strengthen your distribution efforts. Creating a well-organized and disciplined mechanism for following up with prospects is another often-neglected practice for managers new to the fund launching process. Do not assume that people who looked interested in you when you met them will initiate the follow up steps that you want to occur. They are often meeting dozens of interesting new managers, but will ultimately only make 1-2 alternative allocation decisions each year. Answer questions you said you would get back to them on, provide the additional details you mentioned you had available back at the office, and generally take responsibility to drive the process to an ultimate investment decision.
BECOMING A SUCCESS TAKES 10% INSPIRATION AND 90% PERSPIRATION
Thomas Edison was certainly right about the ratio of effort it takes to carry a book to best seller status, or a fund from launch to established success. There’s very little magic involved in making this happen; rather, lots of hard work devoted to the kinds of efforts that will likely yield desired results combined with a little bit of pure luck is the proven combination for success. For managers who have the determination and discipline to drive the process, it can pay to follow this path.
Diane Harrison is principal and owner of Panegyric Marketing, a strategic marketing communications firm founded in 2002 specializing in alternative assets. She has over 25 years’ of expertise in hedge fund and private equity marketing, investor relations, articles, white papers, blog posts, and other thought leadership deliverables. A published author and speaker, Ms. Harrison’s work has appeared in many industry publications, both in print and on-line. To read more of her published work in alternatives, please visit www.scribd.com/dahhome. Contact: firstname.lastname@example.org.