To survive as a business, an alternative investment management firm must have a repeatable, predictable, sustainable capital-raising and retention process. While this hasn’t been a priority in recent years, it must become one. Our newest white paper authored by our CEO Clint Coghill, “Building a Capital-Raising and Investor-Retention Machine,” explains why this shift is important, and how to initiate a focused, effective process.
In the past, alternative investment firms thrived by word of mouth. The community was small, limitations were few, and communications were streamlined. In today’s arena, the hedge fund and private equity markets have become more mainstream, increasing the appeal of solid performers who are institutionalized. Professional investors are less comfortable with risk, making institutionalization of a firm’s processes nearly as important as performance.
Attracting and retaining professional investors and wealthy individuals is crucial for continued growth. Firms must pay equally close attention to both capital raising and investor retention.
Our white paper paper details four specific components for building a repeatable, predictable, sustainable capital-raising and investor-retention process.
1: Strategize to identify ideal prospects.
Hedge fund managers must review the relationships they currently have and the relationships they want to develop to identify the best prospects for their fund(s).
2: Prioritize to create a battle plan.
Determine who should reach out to the prospects identified, and when. Prioritization may be based on territorial planning, an investor’s relationship with a team member, the prospect’s ideological fit with a certain fund, and/or type of investor.
3: Communicate to ensure client satisfaction and loyalty.
Clients expect and demand consistent communications that are both clear and transparent. Develop a strong relationship with the investor from the beginning through regular communications so that clients know what is happening with the fund.
4: Measure to track and assess KPIs.
Embracing a true business mindset includes using productivity and reporting tools to measure KPIs. Metrics can be used to improve operational performance, increase revenues, and take advantage of market opportunities.