By Diane Harrison
Despite being overused in finance, the golfing analogy ‘Drive for show, putt for dough’ bears relevance in alternative investments. While the bigger, flashier managers in alternatives often garner the most media and investor attention, smaller managers have a real chance to exhibit their investment acumen through the power of a well-crafted blog.
Emerging managers too often believe that performance figures tell the story for their fund, and are concerned that investors won’t ‘listen’ to them until enough time has passed to provide a significant amount of data on record. This mindset ignores the potential for managers to articulate the strategy behind their numbers and to start a dialogue with potential clients that reaches well beyond monthly returns. Expand your investment voice beyond the numbers game of fees, rankings, and comparisons, and you can expand the potential investment base.
CONNECTING WITH YOUR AUDIENCE PAYS REAL DIVIDENDS
Fund managers are already convinced of the value of getting face time with investors, and will spend most of their marketing budgets trying to maximize these opportunities. They will budget significant amounts on conferences, personal meetings, and for third-party intermediaries, not to mention the travel time and additional expenses these efforts incur. All of these efforts are important ways to foster building communication channels with investors, but there is another underused tool largely ignored by these managers: blogging. While conferences and third-party arrangements cost thousands of dollars per occurrence, using the power of the written word to reach thousands can be both an efficient and effective part of an investor communication process.
Talk is cheap, but bogging cheaper still. Blogging is free, easy to do and, at the rate of perhaps once or twice a month, requires a minimal amount of time and effort on the part of a fund manager. Blogging can support the articulation of a manager’s strategy process beyond the standard performance-based perspective. A collection of blogs over time can showcase an emerging manager’s investment philosophy in both conviction and learning lessons for potential investors. It can bring potential clients to a fund’s website and be a referral source for additional investors as it gets shared by those who find the words insightful or instructive. A well-read blog is communication money in your pocket.
EDUCATE, DON’T PONTIFICATE
While many individuals are averse to being sold something they aren’t sure they want or need, most people appreciate the opportunity to learn, particularly when it pertains to investment advice. Emerging fund managers, while often unknown to the larger investment audience, have a great opportunity to present themselves as an educator and begin to establish themselves as an influential presence within the community. When you provide your readers with professional advice, you not only give them something of value, you define yourself as an expert voice in the alternatives space.
Taking on the mantle of a giver and not a taker can also pay dividends over the long run. Become a contributor to the broader investment conversation, not just a seeker of investor opportunities. Establishing a blog as a place to keep your prospects and clients informed, by letting them know about new investment trends, technologies that impact the industry, and examples of good or unfortunate developments within a sector allows you to build relationships that extend beyond reporting monthly figures.
Make a conscious effort to provide content designed to generate interest in your business by being useful or entertaining, without specifically asking for something in return, and you are on your way to owning a powerful marketing strategy. Make your fund’s raison d'être a dynamic conversation. While a blog post is a brief, typically a 500-1000 word count piece of content, it takes thought, time, and effort to make it succinct and relevant. Crystallize your thinking into small bite-sized gems, choosing to articulate the most meaningful events and the most important thoughts that impact your fund strategy, investment sector, and target investment audience,
Spend some time formulating inspiring topics and create a blog calendar for future posts. Repeat the process on a regular basis, adding and deleting topics to create the dynamic conversation thread that a well-planned blog provides its readers. Source these topics both from the fund’s internal team and solicit ideas from external contacts within the investment community. Blogs need to be timely and a place where readers return to for continuing inspiration, entertainment, or education. Plan to develop a blogging voice in these areas where it makes most sense for your expertise and communication style. A side benefit of blogging is also that it can be a great recruitment tool. It can demonstrate to people why they should want to be a part of your team.
LEADING BY EXAMPLE
Managers may think initially that they won’t have enough to write about once they’ve posted a blog or two. Yet the nature of their business lends itself to a steady stream of potential topics, by virtue of the research they already do for their investments. Investors are always hungry to understand more about what it is their managers actually do to generate results. Without giving away a specific company name or existing position in their portfolio, a blog can be used to describe the current market environment, the challenges or advantages this presents to a position, and the potential growth or decline that might develop within the sector.
For example, a real estate portfolio with concentrations in the Southwest might discuss recent survey trends showing the migration of new residents to Arizona and Texas (or the migration from these areas) and what this likely means for housing prices. A biotech portfolio manager might blog about the importance of disruptive innovation in the development of new drugs or medical technologies. A microcap manager might talk about the process for start-up companies to develop themselves into a viable acquisition target. All of these topics can be expanded into serial blog discussions that will help illustrate the direction and focus such fund managers take in their approach to investments.
While inexpensive to employ in terms of actual dollars, the intrinsic value of blogging can greatly enhance the articulation of a manager’s strategy process. Over time, this can significantly support an emerging manager’s marketing efforts and investor communication. A final question: did these roughly 1,000 words convince you of the benefits of a blog?
Diane Harrison is principal and owner of Panegyric Marketing, a strategic marketing communications firm founded in 2002 specializing in alternative assets. She has over 25 years’ of expertise in hedge fund and private equity marketing, investor relations, articles, white papers, blog posts, and other thought leadership deliverables. In 2017, Panegyric Marketing has been awarded Global Fund Awards 2017 Financial Services Marketing Firm of the Year - NY, USA, Corporate Insider Business Excellence Awards 2017 Financial Marketing Firm of the Year – USA, and M&A Insider Awards 2017 Financial Services Marketing Firm of the Year – USA. A published author and speaker, Ms. Harrison’s work has appeared in many industry publications, both in print and on-line. To read more of her published work in alternatives, please visit www.scribd.com/dahhome. Contact: dharrison@panegyricmarketing.com or visit www.panegyricmarketing.com.