PEI IR, Marketing and Communications Forum recap

Tim Flannery
Tim Flannery
May 1, 2023

The days of easy money seem to be gone. 

We heard that from fund manager after fund manager at the PEI Investor Relations, Marketing, and Communications Forum in New York on April 19th and 20th. Fundraising is taking longer, investors are shrinking their commitments when there’s more competition over their money, and investment strategies are being scrutinized.

Returns are required, but non-investment strategy comes into focus.

While investors obviously care about returns, they must trust in your firm’s strategy and operations, its reputation, and you, the manager. To earn and maintain trust, there’s more focus on investor relationship management. 

So how do you earn trust? It’s not immediate. It’s a long-term investment in transparency and communication. 

Whether it's a portfolio company update, strategic change for the firm, or reaction to current events, your investors can get access to information without you providing it to them. If that news is delicate, then you’re stuck being reactive. Some investors may force you to be proactive. Regardless of whether that pressure exists, you earn credibility by being upfront. Plus, there’s an added bonus that you can control the narrative. 

One fund manager at the PEI Forum shared a related experience: when their fund launched its second strategy, the team knew it was imperative that their investors heard about it directly from them. Their managing partner called each investor to personally explain the decision, giving them an opportunity for honest feedback instead of feeling ambushed. Some feedback was hard, but that’s the cost of transparency. 

That communication strategy required nuance. Not all investors are created equal. In that example, their larger, sovereign wealth fund investors were excited because the firm introduced a diversified strategy while their smaller investors were concerned about lack of focus.Too often fund managers think of “the investors” instead of recognizing their interests are unique, and sometimes divergent. Segment your communication appropriately. 

Firms’ brands will be a big lever for getting investor dollars.

Another major theme at the PEI Forum was brand. Too often treated as just a logo and color palette, a brand is a firm’s reputation. Building and activating a strong brand and a unique voice is a time- and resource-intensive exercise that requires a soft touch.

When you produce content, it must offer genuine value to investors, not just self-promotion. You have expertise. Share it. By educating your investors, you establish authority. But don’t do it without measurement. Take a look at engagement to refine the strategy. 

Everyone responds to feeling valued, including investors. By doing deeper dives into investment strategies, shaking up the format of annual meetings to encourage more interaction, thinking creatively about events and engagement, and improving the user experience they have when interacting with your fund’s digital interfaces, your investors will market your firm for you. 

Improved brand leads to a better fundraising strategy and more sources of capital.

Given the current fundraising environment, the use of placement agents was robustly debated. 

More fund managers are using agents, but when they’re not used thoughtfully then they’re destructive to the firm’s brand. But that doesn’t mean the right placement agent can’t be incredibly helpful. Honestly evaluate your capabilities and find the gaps then do your diligence to find a placement agent with the right network.

Don’t ignore geography as part of that evaluation. There’s a big opportunity in international markets. But if your agent isn’t from the area, doesn’t have deep local networks, or can’t speak the language fluently, then your odds of success are lowered. And while that means targeting multiple geos requires working with multiple, local agents, the complexity is likely worth the payoff. 

Don’t ignore retail investors. There’s been more participation from them in recent years. There’s an allure and serious benefit to diversifying your investor base, which is why the majority of sophisticated asset managers we know are exploring it. But retail’s needs are different then professional investors, including in onboarding and communications. They’re like “not all investors are equal” but more so, so they should be thoughtfully accounted for everywhere from onboarding to newsletters to events and more.

They expect digital experiences to be as streamlined as logging onto a social media app and their tolerance for manually completing investor agreements is virtually nil. Hence, our existence. 

Take advantage of the flywheel.

It’s a major investment to build a brand and engage investors creatively, but a strong brand paired with great returns is how to build a sustainable investment firm. But even with long-term ambitions, there are short-term effects to be had: returning commitments, increased commitments, investor referrals.

The best fund managers have been building brand equity and activating it well. It serves them in boom times and in markets like today. Even if managers haven’t focused on being an efficient marketing machine, it’s not too late to build up preferences and turn that into capital. 

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