Tag Archives | investor relations

Alternative Asset Managers Heads Up! An ESG Wave is Headed to Your Mid-Market

Navatar Helps Meet Investors' ESG Wants Despite Donald Trump’s climate change skepticism and deregulation promises, one of our major predictions for 2017 is that mid-market private fund managers are going to have to pay much more attention to environmental, social and corporate governance (ESG) issues.

Let me explain why. For one, ESG is a trend with a ton of inertia behind it. These types of things tend to start at the top of the market, where resources and specialists are in plentiful supply, and work their way down. KKR for instance publishes a detailed ESG report annually, and has a section on its website dedicated to responsible investment. You would be hard pressed to find anything similar at a firm managing south of $1 billion, but it’s becoming a point of conversation in mid-market circles. In fact, a new PwC study found that more than two-thirds (70 percent) of managers have now made a public commitment to investing responsibly. In 2013, the comparative figure was 57 percent. But elevating responsible investment from a do-good side show into a core element of your firm culture means putting action behind those words.

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Amid Performance Woes, the Hedge Fund Industry Wisely Turns to Investor Relations

Financial CRM May Help Hedge Fund Managers with Investor Relations and Fund Performance

The hedge fund industry is facing something of an identity crisis at the moment. Slumping performance figures and investor revolt against the standard “2 and 20” fee model is forcing a shakeout: 291 hedge funds shuttered in the first quarter of 2016, offset by only 206 new funds started up, according to fresh data from Hedge Fund Research. Last year saw the most closures since 2009.

Survivors of the fallout are asked to slash costs and explain again how they outperform the market net of fees. Over the past five years, hedge funds provided investors a measly 1.7 percent return, according to the HFRI Fund Weighted Composite Index. Had that money been invested in the S&P 500 instead, the average annualized return would have been 11 percent.

If things don’t improve, expect more hedge fund outfits to struggle during fundraising. Already the $300 billion California Public Employees’ Retirement System (CalPERS), seen as both a bellwether and pacesetter for other institutional investors, has left the sector. Other big-name investors, including MetLife, American International Group and the New York City pension plan are reportedly set to do the same.

Which makes the timing of a new release from the Alternative Investment Management Association (AIMA) so important. Last week, the hedge fund trade body published an investor relations best practices manual that touches on everything from pre-meeting planning to on-boarding procedures to crisis management. The guidelines are only being made available to AIMA members, but a scan of its executive summary hints at just how much thought and effort went behind its creation.  Continue Reading →

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Eight Questions That Alternative Asset Fund Managers Must Ask Before Hiring a Placement Agent

Placement agents are in vogue.  There are tens of thousands of money managers and alternative asset fund managers that are totally dependent on them. In 2015, more than 50% of private equity funds that closed used a placement agent, according to Preqin.

It isn’t hard to understand why. Fundraising requires an intense focus over 17-18 months, not to mention specialization, relationships and physical proximity. A fund manager devoting more time to the fundraising process has less time to focus on implementing the fund’s investment strategy.  Furthermore, placement agents have a much broader reach and more up-to-date investor knowledge than most managers could achieve without a large internal marketing/sales team.

What Private Equity & Real Estate Funds Should Look For in a Placement Agent

Placements agents range from specialized divisions of large brokerage firms to small and midsized independent firms. The larger firms work on six to ten fundraising mandates per year. Therefore, they prefer to undertake mandates that represent the ‘low hanging fruit’—a fund that’s easily marketable. Others are specialized based on certain asset classes, investor type, offerings, or geography.

To be successful, placement agents must leverage the intelligence from their previous mandates and track institutional investors and their investment preferences. Most of them use Navatar to manage multiple mandates and stay on top of investor activity.

We spoke to some of our placement agent customers to get their perspective on what it takes for a placement agent to succeed when working on a mandate.

Download this free eBook, “Eight Questions That Alternative Asset Fund Managers Must Ask Before Hiring a Placement Agent,” for the insights gained from these conversations.

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Financial Firms, Salesforce.com and Thumb Drives in Iran

The New York Times today talks about America’s cyber attack on Iran and about duping someone into inserting malicious code. A hard trick because the computers running Iranian centrifuges were physically isolated from the Internet.

“It turns out there is always an idiot around who doesn’t think much about the thumb drive in their hand,” said a plan architect.

The term “idiot” is probably unfair. The people working at a nuclear plant probably are smart but thinking about other things than security. That’s why the ruse was so clever. Who hasn’t received a thumb drive as a promotion and stuck it into a computer without thinking.

The people we work with in private equity are all smart with great educations. Regardless, I expect that some are still keeping your strategic buying targets, your notes and investor lists in Excel. Probably still saving your spreadsheets onto virus vulnerable hard drives and backing up and moving data with thumb drives. Right?

Perhaps one of the partners is at this moment using a thumb drive he/she received as a promotional gift.

As head of sales here, it would be irresponsible not to say that you would be safer with Navatar and by having your data stored securely, mirrored and backed up in the salesforce.com Cloud. That way, only you have the logins and the ability to access your data.

So, think twice about that thumb drive. Talk to us about upgrading to Navatar.

Allan Siegert

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