Emancipation from participation

The mindset of "I'm OK, you're OK" endorsed by today's progressive parents who aim to reward their 'precious snowflake' children for every endeavor regardless of outcome is a dangerous one to contemplate in investment management. In contrast, meritocracy is alive and well in alternatives. There are most assuredly investment winners and losers, and they are here to stay. Managers must not fall victim to the mentality of 'good enough' if they hope to attract and retain investors to their cause.

Investors do not hand out participation medals

Successful investors are definitely not helicopter parents. They like winning and fully subscribe to the notion of rewarding alternatives managers who can deliver results. Investment management winners by and large try harder, do better, receive more, and keep moving forward. Losers join the ranks of the 'once was,' and find something else to do in relatively short order. Managers who want a greater flow of investment assets might take note of the following suggestions to avoid becoming an investment 'snowflake.'

Practice doesn't always make perfect...

Performance counts. Practice performance is not the same as performance under pressure. Ask anyone who has taken practice exams with ease, only to crack under the pressure of delivering similar results when scored. Unfortunately, there are no 'do-overs' in finance. Monies lost are monies gone, period. For struggling managers, climbing uphill from a steep performance decline is an arduous and often lonely exercise, as investors jump ship and move on to greener pastures, literally,

Establishing a strong and comprehensive risk management process that works in tandem with a solid investment management strategy will help protect managers from unnecessary volatility fallout. For those managers developing a new strategy approach, work out the investment kinks with personal capita......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.