The elusive perfect pitch… all too often, portfolio managers and founders of investment boutiques go to great lengths to boast about their strategy and rail off a bunch of numbers —only to be rejected by their ideal investors. Why does this happen? Too much yammering, too many digits. The secret to successful pitching is to stop and listen. Stop talking at investors and have a conversation with them. If investors wanted to hear you spit stats, they’d read your fact sheets. Instead, ditch the data and ask these questions:
How are you? What’s new? I read/heard/saw this cool thing about you…
The best question to kick off a conversation with an investor is one that is not about investing at all. Come down off the mound and be a person. Before the meeting, find out what is happening in the investor’s life either inside or outside of the office. Learn about them so you can put yourself in their shoes. People invest with people so connecting on a human level will set the tone of your meeting as two friends getting together versus a salesperson pitching a prospect.
What is the investment committee working on? Where do you have active searches?
These questions help you understand what is important to the investor. Right now. If there is an active search, it means there is money in motion. Why is the search underway? What criteria is important to the search? What is the timeframe of the search? They might share searches that don’t align with what you do - that’s okay! Use it as an opportunity to mention specialists in those asset classes whom you know and respect. They might however have a search in an asset class that you do specialize in. You’l learn more about their needs and how you might be a solution. Take some notes and keep asking questions.
What does your current asset allocation look like?
(split between public vs private, equity/fixed/alternatives, growth vs value, international vs domestic, etc.)
In order to put yourself in the investor’s shoes, you need to know where they are standing. It is challenging to solve a problem or help someone take advantage of an opportunity without context. As the investor answers, you will discover clues about what is important to them and how your fund may help improve their overall allocation. Your fund doesn’t exist in a vacuum and you won’t be their only allocation. Complement, don’t compete.
Given the markets now, where do you see opportunities / challenges? What are you/your clients worrying about right now?
Pain and pleasure typically drive decisions and which one do you think is the biggest motivator? That’s right - pain. The investor needs help to solve this or take advantage of that. In addition, remember that many institutional investors are allocators; they’re allocating capital on behalf of end clients. End clients may or may not approach the markets in a rational way, but regardless, the advisor must be cognizant of what those clients want. It’s a delicate balance of doing what’s right for their clients and doing what the investors want done. Business risk is real; building an asset allocation model and selecting funds is not a purely academic exercise.
What are you doing in [insert your fund’s asset class]?
If your asset class has not come up in the conversation so far, now is your chance to find out more. Not about your fund specifically, but how the investor approaches your slice of the market. What are they investing in? Who do they respect? What criteria is important? If your asset class has been a topic of conversation, are there any additional questions that would help you gain a better understanding?
Now that you have context, you can share how your fund might be able to help. Which of the investor’s problems does your fund solve or which opportunity does your fund harness? Continually challenge yourself with the question, “Why should this person care what I’m saying?” Ask yourself, “so what,” five times! Investors will care when the conversation shows them how you can solve their specific problems or help them harness a unique opportunity, as opposed to how they can help you grow your fund’s AUM.
Here's to better meetings. Conversations, not presentations. Questions asked, not unsolicited advice. Instead of perfecting your pitch, try ditching your pitch all together.
Come to your meetings with prospective investors more prepared than ever
The Investor Meeting Playbook includes tips and tricks gathered from our years of experience helping portfolio managers and investment boutique founders close deals with investors.
Also included: Fully editable Meeting Prep Template, which includes everything you need to make note of before you come to the table and includes industry-specific advice.
