Maximizing Opportunities on Emerging Manager Platforms

In the current climate, where traditional active management often faces skepticism, the pursuit of value-adding strategies remains a bright spot. Smaller asset managers, often known for their unique and concentrated strategies, are well-positioned to benefit from this trend. These managers should actively seek emerging manager platforms, which are increasingly pivotal in discovering and cultivating new talent.

These platforms are designed to identify, vet, and engage with smaller investment managers, offering institutional-quality, multi-managed portfolios. Traditional consultants, often constrained by resources, might overlook these emerging talents, but emerging manager platforms fill this gap effectively.

Smaller firms, frequently limited by less experienced marketing and sales teams, face challenges in differentiating themselves in the competitive institutional marketplace. Therefore, any effort to simplify the researcher's task is valuable, whether targeting traditional consulting firms or emerging manager platforms. Implementing a dedicated, efficient, and proactive sales and marketing strategy can be a game-changer in this tough environment.

Emerging manager programs, often more accessible and responsive, should be a key target for smaller managers. These platforms are more likely to provide immediate feedback and engage in meaningful dialogue, a refreshing contrast to the sometimes lukewarm responses from larger, multi-product consulting firms.

The first step for a manager approaching an emerging manager platform is identifying the right contact person. The aim is to become a recognized potential addition to their roster. Patience is essential, as it's rare to find a gatekeeper actively seeking to fund new firms. Most emerging manager programs offer clear guidelines on their websites for initiating contact. An effective start usually involves submitting a sample questionnaire, marketing materials, and performance data.

For smaller firms, balancing time and resources is crucial. Initiating contact with a 30–40-minute conference call, rather than a physical meeting, can be a more welcome and productive approach.

Importantly, the due diligence process for back office operations has become as rigorous as that of traditional consulting firms. The expectation for robust infrastructure is immediate, not contingent on future asset growth.

Fee structures are another critical consideration. Emerging managers must be prepared to accept lower fees, as unfortunately, there is little room for negotiation. It's important to understand that many managers are now "fee takers," and reluctance to accept these terms may lead to missed opportunities.

In summary, here are five updated key points for navigating emerging manager platforms:

  1. Utilize online portals and websites for insights into specific firm processes.

  2. Thoroughly complete industry databases to facilitate pre-qualification.

  3. Begin with a concise introductory call to gauge the potential for future meetings.

  4. Be prepared to accept and work with reduced fee structures from the outset.

  5. Actively seek and incorporate feedback throughout the process.

Persistence and patience, combined with professional proactiveness, are essential. The sooner you engage with these platforms, the quicker you can integrate into the evolving landscape of asset management.

Related: Revamping Sales Strategies and Incentives in the Modern Investment Management Environment