Successful Alternatives Fund Marketing [Video]

Are you looking to grow your alternative investment management business? In the highly competitive world of fund management, effective marketing and fundraising can be the determining factor between success and failure. Over the past 13 years, approximately 50% of funds have closed, with an average lifespan of 3 years. Furthermore, only 11% of funds exceed the 100 million AUM milestone. Successful fund marketing involves specific strategic protocols.

In the latest Alts Engine episode, Shane Stiles, founder and president of Gate 39 Media, interviews Bryan Johnson of Johnson & Company – a leading alternative investment marketing consultant firm. Bryan shares his valuable insights and top priorities regarding successful marketing, sales, and fundraising for startup and growth stage funds.

How Data, Strategy & Process are Keys to Success

Having a data-driven process in place and educating managers on the differences between marketing and fundraising is essential. Without strategy and process, firms are often improvisational, yielding inconsistent, suboptimal results.

Why Pitching Fund Performance IS NOT Marketing

Often, managers equate pitching fund performance with marketing. Although fund performance is essential to successful messaging, it is not marketing. In fact, it is secondary to the trust and the perception of risk reduction a prospect places in you as a fund manager. Conversely, marketing is the specific strategic execution of attracting, nurturing, and converting leads into clients, which differs for small firms vs. larger firms.

Defining Your Unique Differentiators

What is your story? It’s crucial to highlight what sets you apart, what makes you unique, and highlight your unique selling points. By telling your story effectively and crafting compelling narratives, you position yourself as the solution investors need.

Telling a Prospect-Specific Story

People buy from people they trust. Building a successful fund involves building relationships, gaining trust, and differentiating yourself from competitors. In this video, Bryan Johnson discusses the three narratives managers should consider when telling their story to prospects.

1. How You Are Perceived: This is the story the prospect is telling themselves about YOU because of your current marketing (website, thought leadership, campaigns, fund pitchbooks)

2. How the Prospect Perceives Life: This is the prospect’s life story, aspirations, goals, world view, and challenges.

3. The Curated, Client-Centric Story: Many tell the story they want to tell rather than the story the prospect needs to hear to reach an actionable conversion.

By integrating your understanding of the first two narratives, you can construct a compelling story that engenders trust and spurs your prospects to take action.

Marketing for Retention, Not Just Acquisition

Often, the funds with the best marketing are winning, not necessarily those with the best performance. Investors often double down on an underperforming investment because of the trust they’ve established with the fund manager. Being excellent at marketing and explaining what is happening in the market will help maintain trust with your investors and ensure you don’t get out-marketed by an underperforming competitor.

Know Your Competition

Success in fund management is often about knowing your competition and how to out-market them to compete for business. Ask yourself the following questions and how you will overcome the competition:

Qualitative Competition- Who’s got a stronger relationship with the investor you’re trying to land?
Quantitative Competition- Who’s outperforming you?
Structural Competition- Who’s got a fund or ETF with lower fees and higher liquidity?

A Consultative Approach to Sales

Complexity demands collaboration. Building trust through collaboration is essential, fostering a consultative sales process and ensuring 360-degree confidence. Pitching alone is insufficient; the focus should be on delivering investor-centric and prospect-specific narratives to create genuine interest and fill portfolio gaps.

Critical Pipeline Development

To succeed in sales as a fund manager, focus on building a strong pipeline based on trust and measurable metrics. Marketing is responsible for heavy lifting, attracting attention, and creating interest, while sales deliver valuable expertise to engage investors. Relying solely on personal networks can lead to exhaustion, so developing and managing a well-maintained pipeline is crucial.

Engagement Gets the Assets

Performance will attract investors, but intelligence and regular engagement will build your prospects and clients’ trust. Engagement gets the assets.

Ultimately, the success of marketing and sales strategies lies in making the right first impression, as it determines whether investors will give you a second chance. In such a highly competitive industry, where thousands of funds are vying for the same assets, embracing a strategic and comprehensive approach to sales and marketing is critical. Marketing is not just about promoting performance but also about delivering value and differentiating yourself in the market.

Having a well-defined process and understanding the different narratives at play when engaging with potential investors will help build trust and relationships based on understanding your investors’ needs.

Need help developing the right marketing strategy to promote your fund and build AUM? Let’s start a conversation!

Alts Engine is a new channel providing alternative investment management professionals with expert guidance and actionable insights to grow their businesses. Through inspiring interviews with trailblazers and industry leaders, we’ll dive into the sales and marketing techniques, strategies, and technologies that lead to success.

About The Host of Alts Engine
Shane Stiles is President of Gate 39 Media, a financial services marketing firm providing online marketing and application development for financial services across futures, equities, alternative investments, and insurance.

About Our Guest
Bryan Johnson is the Founder and Managing Partner of Johnson & Company, an alternative investment marketing consultant firm providing strategic development, marketing & fundraising support for sub-institutional alternative managers.