Making a Case for Emerging Markets is the title of a presentation that I gave today at the Investment Management Institute’s Consultants Congress in San Francisco; click here to see a copy.
While there are no silver bullets to get emerging managers into searches, the good news is that consultants are more receptive to less-traditional managers in the wake of the financial crisis. Consultants are looking for managers that can add value in today’s very challenging investment environment, and they are more willing to look at managers with shorter track records and fewer assets under management (AUM).
Having said that, the burden remains on these managers to articulate their investment strategy, their uniqueness and to demonstrate the strength of their organizational infrastructure. The door is now open to these managers – but hard work still remains to actually get shown to clients and ultimately win business.
At the end of the day, of key importance is the ability for these managers to develop a trusting relationship with the consultant. Communications – open and proactive – is vitally important as is honesty. For example, if you make an investment mistake, own up to and demonstrate what you have learned from the mistake. And above all else, remember that consultants do not like surprises.
Today’s investment environment demands that consultants consider a wide range of manager candidates. If your firm can add value in a repeatable and easily articulated manner, than being an emerging manager does not present the hurdle that it used to.
