Active Management is Back: How Do You Take Advantage of It?

With passively managed funds dominating inflows over the past decade, market prognosticators said it would take a bear market to convince investors to reconsider actively managed funds again.

Well, the time is here. If your fund has performed well since the COVID-19 crisis ended the decade-long bull market in March, then advisors and institutions may be more willing to listen to your success story.

In a recent Sondhelm Partners webinar, How Boutique and Emerging Asset Managers are Handling the Pandemic and Keeping Their Clients Engaged, Julie Mansmann from Fund Intelligence and Matt McCue from Emerging Manager Monthly explained how boutique asset management firms can position their active management success stories front and center among their clients and prospects, even in a work-at-home world.

Provide the data – now

If your firm works with institutional consultants, enter your quarterly and monthly performance data into their databases as soon as possible, since many will be open to new ideas for their pension fund and endowment clients. With financial advisors, you’ll want to get your latest returns and commentaries to them quickly as well. In this environment, facts speak first, and the story follows.

Be factual, not self-congratulatory

Advisors and institutions aren’t looking for double-digit returns right now. They’re looking for strategies that can protect liquidity and offer downside protection. If you have a fund that’s been delivering these benefits since the crisis started, it’s time to tell your target audiences how you’ve achieved this.

It’s not a time to be safeguarding your “secret sauce.” You need to be fully transparent in letting skeptical and anxious investors and intermediaries know exactly why your fund is holding its own right now, even down to discussing how the sectors you favor and even individual trading decisions are differentiating it from your competitors.

Provide virtual face time with your portfolio managers

Under normal conditions wholesalers can often act as proxies for portfolio managers. This isn’t one of those times. Now that portfolio managers are no longer traveling to conferences or attending on-site meetings, use some of that time to hold virtual sessions where they can present to and answer questions from your key important advisory firms and consultants.

For those who don’t merit these firm-specific sessions, consider mass-market alternatives such as webinars and conference calls, or produce whitepapers and commentaries. But keep your content focused on your areas of specialty. Your firm’s predictions of when COVID-19 infections will decline or your views on government policies aren’t what people want to hear. They want to know specifically what you’re doing to protect investors’ assets right now.

Speak to the needs and fears of your target audiences

Generic, all-sizes-fits-all messaging rarely resonates with advisors and institutions, and it’s an almost guaranteed door-closer right now. More than ever, it’s critical to understand the priorities and concerns of different kinds of investors.

For example, knowing that many pension fund committees are searching for downside protection to reduce their exposure to underfunded liabilities can help you develop a targeted messaging strategy for consultants that extols these qualities in your winning strategies.

Or knowing that many wealthy investors are asking their advisors for sustainable investing solutions may provide an opening to discuss your ESG offerings that may be doing relatively well right now because they’re not invested in some of the hardest-hit sectors such as oil and coal production.

Don’t turn the lights out

There’s a temptation among many boutique firms that aren’t doing well to suspend communications – other than performance updates – until the crisis blows over. Don’t give in. If none of your clients or prospects hear from you, they may look at your returns and wonder if your firm may be going under.

Head off any speculation by proactively reaching out to institutions and advisors. Be honest and transparent, even if the news you’re delivering isn’t good. If your wholesalers aren’t selling right now, have them serve as extensions of your client service team. They can contact clients and prospects one by one to reassure them that your firm is still there and that you’re committed to keeping them informed and answering their questions. These actions may not generate AUM right now, but they could go a long way toward stemming outflows.

Miss the original webinar? You can view a replay, which is sponsored by Discovery Data, SalesPage and Cohen & Co.

Dan Sondhelm is CEO of Sondhelm Partners, a firm that helps asset managers, mutual funds, ETFs, wealth managers and fintech companies grow through marketing, public relations and sales programs. Click to read Dan’s latest Insight articles and to schedule a complimentary consultation.