Traditionally, the asset management fundraising world relied principally upon a carefully cultivated air of exclusivity, relying on whispered conversations of outsized alpha at country club cocktail parties to drive the high-net-worth FOMO that drove funding efforts. With a decent track record, a pitchbook and a country club rolodex, a GP had everything it needed to raise capital – a simple, yet effective strategy.
While this approach is certainly still effective, the financial world has changed. According to the American Investment Council and National Venture Capital Association, as of 2020 there were 4,500 private equity and 1300 VC firms in the US alone. To these numbers, add approximately 15,000 RIAs and 4000 US-based hedge funds currently in operation. Given the range of viable GP alternatives, a decent track record and a rolodex is simply not enough to attract the attention of increasingly discerning LPs.
Critical questions that an asset manager must ask before defining the branding approach:
- Mission: What is the purpose of my organization, beyond making money? Why do we exist?
- Individualization – What makes us “us?” What are our core values? What makes us different (as people, not as a fund)?
- Market Fit – Where does our fund fit in the marketplace? Who are the right LPs for us? Why does the market need us?
- Perception – How do LPs currently perceive us? How do we need to shape this perception?
- Engagement – What is our plan for connecting with our current and potential LPs
- Consistency – How will we ensure that we remain consistent in our branding across our marketing assets and how will we cadence our engagement? What is our plan to monitor our clients’ perceptions and, where necessary, adapt our approach?
A comprehensive marketing plan, executed with patience and persistence, is now essential to achieving scale within the asset management business. Increasingly, a well-defined branding approach is taking on new importance as asset managers increasingly seek to differentiate themselves from the competition.
