Dispassionate Investing

Dispassionate Investing + Passionate Selling = Increase in AUM

Managers have the first part nailed. The second part, not so much.

We recently put together a deck for a firm whose CIO was extremely passionate. In describing her strategy, she used words like ‘stupidity’, ‘insane’, and ‘crazy’.  There was an inflection in her voice and she told stories (some a little long). You could tell there was a fire burning in her heart. And yes, it all was in support of a very strong strategy and an operationally-sound platform.

In short, the environment was emotionally charged. I felt that there was something different about the fund.  Sure, I had never encountered the strategy before, but I found that the most significant differentiator was the passion of the CIO. It was refreshing, and that itself, telling.

We deal with a lot of managers.  They drone on about how dispassionate they are, their agnostic strategies, the systematic nature of what they do, and God help us: their aversion to risk.  It never occurs to managers that investors are looking for the “fire”, the belief in that a certain thing makes them different.

If you are a manager, I recommend that you stop doing what you are doing and ask yourself if you are truly passionate about what you do.  If you aren’t, pivot, re-tool, re-think, and re-strategize.  Your lack of passion is one of the main obstacles that stands in the way of increasing your AUM.

Marketing is more about how information is delivered than the information itself. Investors are searching for the people that can lead and inspire.  This business is as much about running a good business as it is about investing.

By Kyle Dunn