Investment Managers Have No Windows
All credit for this blog goes to Eli Combs. Eli is one of the best fund raising specialists in the business: www.axisga.com. It was Eli who coined the phrase, “investment managers have no windows” – it is a particularly appropriate analogy for the hedge fund industry.
He compares managers to car dealerships.
I am assuming pretty much everyone reading this, at one point or another, has walked onto a car lot. What happens? Within minutes a salesperson saunters up and starts a conversation. Good salespeople are fairly skilled at making a tactful approach. Unfortunately, many aren’t.
It is for this very reason that car dealerships have huge windows overlooking their lot. They want to be able to see when someone is interested in their inventory. Why? Because if someone is walking around your lot looking at your cars, they are probably a potential buyer. The dealership will sell more vehicles by approaching people in their lot than waiting until someone walks in their door and asks to speak to a salesperson, or sending their salespeople out to try to sell a car to a stranger on the street. Agree? Of course, it is so obvious that you almost feel foolish making the point.
Replace the car dealership with an alternative investment manager and the dealership’s lot with a manager’s website (or, God forbid, lack of a website).
Imagine how much an investment manager’s chances of securing an allocation would increase if they focused their attention on allocators that are paying attention to them (like perusing their website, watching their video, or reading their investment letters, etc)? Again, it is so obvious that I almost feel foolish making the point. Yet 95% of all managers haven’t built their websites in such a way that allows them to see who is “walking around” and where they are looking.
Therefore the phrase, investment managers have no windows, is quite fitting.
And for all those doubters who say that investment managers can’t have websites, I highly doubt Bridgewater, Two Sigma and AQR have been able to “slip” under the radar.
By Kyle Dunn