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Gaining an Edge: How Smaller Managers can Succeed in Today's Environment

If you are an investment manager, you know that growing your assets and revenues is harder than it used to be. Working in a “virtual” environment is yet another challenge for smaller managers looking to get attention and successfully navigate through the due diligence process. Unlike the era of expanding defined benefit plans, today, most institutional investor portfolios are fully invested. At the same time, a shrinking number of investment consulting firms and an exponentially larger universe of attractive investment strategies have combined to create a fiercely competitive marketplace for the fewer opportunities that do arise.

In this environment, even firms with top-notch credentials and investment results can struggle if they don’t also master the sales and marketing process. The good news is that you do not need to invent a new or proprietary approach or build an internal sales team to be successful. Successful marketing has a proven and repeatable process for pursuing target investors and converting those opportunities to assets. The process requires more diligence and typically takes longer than years past; but with the right commitment it can work.

Phase 1: Create a Story and a Plan

You may have strong performance, a highly disciplined approach, decades of experience, and a team of highly specialized sector researchers. But so do literally hundreds of other investment managers. So, how do you break through the competition for your audience’s attention? The answer is you need to develop a “story” that highlights how your approach gives you — and consequently your investors — a unique advantage. This story presents your differentiators in terms of your audience’s needs and concerns and gives them a compelling reason to put your firm on the short list.

Phase 2: Make an Impeccable First Impression

Once you have created a clear, targeted marketing strategy and all the pieces are in place, you can begin your sales process. You contact your prospects, send materials, and request initial calls and meetings. In a virtual environment, portfolio managers’ face time is even more critical. But that is just the opening salvo. Unfortunately, too many asset managers start their sales efforts around published RFPs. Unless you target a prospect well before an RFP is issued, you are probably too late to earn their consideration. By the same token, resiliency is key. If you stop after the first “no,” you are unlikely to achieve long-term success. Effective sales and marketing processes are characterized by persistent and proactive efforts over a sustained period of time.

Phase 3: Patiently Manage Your Prospect Pipeline

The institutional sales cycle, once measured in weeks or months, now takes years. Once you have gotten onto your target’s radar screen, you need to stay active. Continuously providing compelling information and content that helps their decision-making and reinforces your story.

Institutional investors invest with people they know and trust. Simply put, this process takes time.

They need to get to know you, learn your story and explore how your strategy fits with their needs. Building, and nurturing industry relationships has always been an important part of the sales and marketing process. The consolidation of consulting firms has made it absolutely essential to have strong credibility with the highly selective and powerful surviving gatekeepers that remain.

Maximize the Best Use of All Your Resources

The main reason most investment managers fall short in growing assets isn’t that they don’t know the steps in the sales and marketing process, but they fail to give it the time, energy and resources it requires.

The third-party marketing industry is made up a variety of firms. Each offers its own unique blend of industry focus, asset class product expertise, and geographic concentration. And while some third-party marketers serve only as sales reps, successful firms offer a comprehensive sales and marketing function which range from developing the plan to creating sales materials, creating a compelling website, completing RFPs and DDQs, populating industry databases, as well as systematic outreach and follow-up.

If you are considering working with a third-party marketer, look for a firm with experience and a solid reputation in your specific market, as well as strong credibility with those gatekeepers and buyers. In addition, it is critical that to be sure they have a strong understanding of regulatory requirements and a culture and track record of compliance. This is an important strategic relationship. You will be working closely together on a daily basis, so implement a hiring decision-making process that is no different than hiring a senior executive or partner for the long term. You need to like them, and you need to trust them.


Arrow Partners is a third-party marketing firm with more than 25 years of institutional investment experience. We work with a limited roster of clients to provide a dedicated, comprehensive sales and marketing function that helps investment managers achieve their long-term goals for asset growth. You can learn more at

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