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New Managers February 2020

MARKETING CHALLENGE: A new year's alternatives resolution to keep

 

A New Year's Alternatives Resolution To Keep Diane Harrison Marketing Challenge A common habit in January, but one frequently broken, is making a slew of resolutions for change. Rather than setting too many goals to change and spreading your efforts too thin, pare down the amount of change to make and prioritize a couple. When it comes to selling alternative assets, managers looking to increase interest in their offerings can apply this tactic in a simplified sales pitch.

OFFSETTING THE TIMEWORN ARGUMENT IN AN ELECTION YEAR Ask any salesperson in the alternatives space what is their biggest challenge to increase allocation or gain new assets for a hedge or private equity fund during a presidential election year, and you will almost certainly hear them say they receive some slight variation on this theme- "I'm going to sit tight until we know what the election outcome is, because things could change in regulations and geopolitical positions that make me wary." Whatever the current allocation bucket is for these sales targets, their de facto stance is to stay the course, or perhaps move more into traditional slots, such as cash, awaiting a higher level of conviction about what they think might happen post Election Day. This frustrates the alternatives salesperson, as it tends to shut down a meaningful dialogue about promoting any investment outside of cash or fixed income. So what to do about this? Assuming no one wants to sideline selling activity completely every 3 years, a resourceful alternatives salesperson needs to counter this reflexive attitude of resistance with a position that can open the conversation. Using this year as a proxy for the counter sales pitch, let's role play a possible scenario. 2020...HURRY UP AND WAIT To set the economic scene, here's a brief recap of what every investor is hearing in year-end manager letters across the asset classes: The U.S. stock market is at an all-time high and leads the rest of the wor......................

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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.
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