Marketing Alpha: How New and Small Managers Succeed Raising Assets
Meeting the Marketing & Fundraising Needs of Sub-Institutional Alternative Managers
INTRODUCTION
Bryan K. Johnson
Founder & Managing Partner
- 25+ years experience in alternative investments as an investor, marketer/salesperson, advisor & expert witness.
- Launched Johnson & Company in 2010 as a firm singularly dedicated to delivering professional marketing advisory and execution to sub-institutional alternative asset managers. Consultation and training of 300+ sub-institutional managers.
- Prior to Johnson & Company, served as Global Head of Business Development for the Alternative Funds Group (AFG) with Moody’s Investors Service in New York City. Senior Relationship Officer actively called on investment executives, board members and decision-makers at endowments, foundations, taft-hartley (unions) plans, single and multi-family offices, public pensions, broker-dealers, RIAs and institutional consultants. Led deployment of Operational Quality (OQ) ratings for hedge funds and credit ratings for alternative investment securitizations such as Collateralized Fund Obligations (CFOs) and debt obligations of alternative asset managers. Clients included: Citadel, Fortress, King Street, Marathon, SAC, Millennium, Brevan Howard and Marshall Wace.
- Before tenure with Moody’s, served as senior lead consultant and chief expert witness for The Attorney General of Texas and The State of Texas in the evaluation of hedge funds and private equity firms involving disposition of the generation assets of Texas Genco and the multi-billion dollar true-up of Centerpoint Energy (CNP:NYSE)
- Preceding engagement with the State of Texas and The Office of the Attorney General, CEO/Founder of Gotham Bay Partners, an alternative investment firm which developed investment policy and asset allocation strategies for 60+ private wealth investors and family offices as well as evaluated single manager and pooled private equity and hedge funds. Raised and allocated $3+ billion to external managers. Principal investor/portfolio manager of a $100 million dollar internal private equity fund.
- B.A. from Washington and Lee University (Lexington, VA) 1986.
STARTING A FUND IS EASY. RAISING ASSETS IS NOT.
SUCCESS REQUIRES A MARKETING PROCESS.
For new, first-time and smaller managers, especially those with AUM less than $100 million, the need to grow assets quickly and consistently is critical but MARKETING and RAISING ASSETS are overwhelming, hyper-competitive, complicated, confusing, complex and crowded.
There are currently 18,000+ U.S.-based hedge funds and 4000+ private equity firms in active fundraising and AUM growth is a constant primary objective for each firm.
The majority of new and smaller managers believe that performance will attract assets. Research shows performance does not attract assets but only brings a degree of attention.
There are literally thousands of smaller venture capital, private equity, private credit and hedge funds that display consistent out-performance on a risk-adjusted, peer, relative or absolute return basis but they struggle to raise assets. In fact, most new, first-time and smaller managers rarely get AUM beyond personal capital along with small investments from family, friends and minor amounts from a few social and professional relationships.
To make matters more difficult, there is an enormous amount of hype, noise, wrong information, myths and fiction about raising assets for new, first-time and small managers.
The failure raising assets is a direct product of poor understanding, implementation and execution of the "correct manager-specific" MARKETING PROCESS.
Speaking plainly, success raising assets depends entirely on consistent execution of "THE MARKETING PROCESS".
Let's be clear: "Constantly pitching performance" is NOT marketing and is NOT a process. The truth when it comes to the marketing process: Most new, first-time and small managers don't know what to do and how to consistently execute the "right way".
An important note: Many new and smaller managers have the expectation that "commission-only/performance/transaction/success fee-compensated" third party marketing (3PM) and prime broker capital introduction (Cap Intro) will be sources of marketing and capital raising assistance. However, for managers with less than $100 million AUM, the "marketing and capital raising processes" are “Do-It-Yourself” (D-I-Y) efforts. Research shows 3PM and Cap Intro are not options until AUM reaches the minimum institutional level of $150-$200 million.
While the marketing process is entirely "D-I-Y" for new and small managers, most are often highly-skilled in research, trading or some form of investing but do not posses the knowledge, skills, experience and expertise required to execute the marketing and capital raising (sales) processes at the level required in a hyper-competitive fundraising climate filled with idiosyncratically demanding, highly-skeptical and stringently selective investors. Even managers with experience working in larger firms with significant assets under management struggle to raise assets when starting their own fund/firm.
The marketing process for new, first-time and sub-institutional managers with small AUM is completely different than for larger, more-seasoned, institutional-level funds with sizable AUM. Marketing is now more complex, time-consuming, resource intensive and expensive. The commitment, requirements, complexities, demands, skills and nuances of marketing are numerous, often misunderstood and grossly under-estimated by new and smaller managers. It now takes a data-driven, structured, disciplined, focused and consistently well-executed MARKETING PROCESS along with patience, persistence and sharp interpersonal, presentation, communication and engagement skills for new, first-time and smaller managers to consistently raise, retain and expand AUM.
There are 40,000+ institutional allocators globally and 55,000+ individuals and families of private wealth with assets exceeding $30 million in the U.S. alone. There is simply a huge universe to cover tactically. Moreover, the requirements and demands of institutional investors and private wealth are dynamic, stringent and idiosyncratic. As such, strategically understanding how to engage by knowing who to speak to, when to speak to them, and how to speak to them to build a relationship in order to achieve TRUST and ACTIONABLE CONVICTION is essential. However, most new, first-time and smaller managers do not have full clarity and granular perspective of investors nor an acute grasp of fundraising on a “manager-specific” basis. The lack of information, insight and intelligence into investors and the capital raising climate as it pertains specifically to the manager/fund is basically flying blind and leads to expensive and fatal mistakes. As a result, the vast majority of new, first-time and smaller managers experience chronic struggle and failure raising assets.
SOLUTION = PROCESS = “MARKETING ALPHA” = RESULTS.
Since 2010, Johnson & Company has been the ONLY firm with a "proven marketing process" that meets the capital raising requirements of "sub-institutional", alternative asset managers: New, first-time and smaller managers.
Johnson & Company delivers a "proven marketing process" for "sub-institutional" managers to raise assets efficiently, economically and expediently.
The process is comprised of 25+ years experience, expertise and skill marketing alternative assets supported by high-integrity independent research and data that drives intelligent decisions, high-impact investor engagement and consistent execution. That's "MARKETING ALPHA":
- Delivers the critical "manager-specific" marketing execution and fundraising advisory for sub-institutional asset managers to expediently, economically and efficiently raise, retain and expand AUM.
- Optimizes efficient, economical and expedient execution of the fundraising process by building and maintaining a pipeline qualitatively and quantitative comprised of the most suitable investors given the manager profile to then appropriately engage the pipeline in a "investor-centric/prospect-specific" manner. the most suitable and appropriate investors on a “manager-specific” basis.
- Installs commitment, focus, structure, discipline, consultative candor and accountability combined with high-integrity independent qualitative and quantitative research to quickly stop wasting time, effort and money as well as prevent mistakes that can be fatal to fundraising success.
- Deciphers the "manager-specific" complexities and nuances of raising assets by eliminating the marketing hype, noise, wrong information, myths and fiction. A crucial aspect of the process is addressing the strategic, tactical, operational and financial issues of marketing and raising assets on a "manager-specific" basis.
- Catalyzes data-driven execution of the marketing and fundraising processes from information, insight, intelligence and instruction derived from high-integrity independent research.
- Provides "assisted step-by-step execution" of the "manager-specific" marketing process at the level required to optimally-position, prepare and equip new, first-time and smaller managers to raise, retain and expand AUM consistently, faster, easier and less expensively.
For new, first-time and small managers serious about success raising assets, THE MARKETING PROCESS must be priority #1 and "MARKETING ALPHA IS VITAL".
Johnson & Company is uniquely and holistically equipped to help new, first-time or small alternative asset managers consistently raise, retain and expand AUM faster, easier and less expensively but most importantly, successfully with a structured, disciplined, focused and proven marketing process.
If you are a new, first-time or small alternative asset manager, that wants results raising assets, I welcome the opportunity for a candid, no-nonsense conversation.
Continued success,
Invest time to carefully review the resources below. They are instructional and contain immediately actionable guidance about marketing and raising assets.
Interview: Three mistakes that lead to a new, first-time or small managers early death.
An Overview of MARKETING For New, First-Time and Sub-$100 Million AUM Alternative Managers
Close Encounters of the Third (Party) Kind: 3rd Party Marketing & Sub-Institutional Managers
CONTACT:
Bryan K. Johnson
Direct: (512) 786-1569
Email: bryan@Johnsn.com
LHG’s results from the “MARKETING ALPHA” process, reflect the work, focus, discipline, dedication and commitment by Laurence Yang and LHG Capital Management. It is not intended to guarantee any client will achieve the same or similar results; rather, the testimonial represents what is possible. As with any process, results depend on the individual experience, work, focus, discipline, dedication and commitment of the client as well as conditions of the marketplace and numerous elements beyond the control of Johnson & Company.