Being A Poor Marketer Is No Longer Cool.
A lot of Hedge Fund managers still believe it’s beneficial to keep a “low profile.”
Private Equity managers are famous for being “in market” and then disappearing for three or four years.
It’s not that you can’t maintain a low profile and still raise capital, or be successful flashing in and out of the market every three or four years… but it is an increasingly challenging proposition.
Today, opinions are formed across a series of quick impressions. These “impressions” determine whether or not you will get a second look.
Making an impression is a key part of building brand. You are simply trying to influence how you are perceived in the market – long before you make a direct approach to a particular prospect.
And appreciate there are no “catch ups.” Allocators are not going to spend a disproportionate amount of time with you just because you want them to. Tomorrow is like any other day. You are afforded the opportunity to make one small impression. The fact you have a great deal of information to convey is irrelevant.
But time spent marketing is time away from investing. We get it. Unfortunately capitalism doesn’t care.
Do you think Ford wants to be spending time and resources on marketing? Of course not! In an ideal world they would spend all their time and energy improving their fleet of vehicles. But that is unrealistic. Marketing is a necessity in the car business. It is just as necessary in the asset management business. Being a poor marketer or discounting the value of brand is not cool. It simply exposes your lack of business acumen. If you’re tempted to point to ultra-premium brands that don’t seem to do any marketing, consider how it is that you know about them: they are spending a great deal of time and effort to maintain and hone their brand image.
The general hypothesis, there is greater business risk in skimping on building brand and/or vanishing from view for three or four years than there is in maintaining a constant presence in the marketplace.
Going forward the capital raising process will run in parallel with brand building. The industry’s laissez-fare attitude around marketing will be replaced by an appreciation for its importance. Marketing prowess will become one more check box on an allocator’s list of “must haves.”
By Kyle Dunn