Fund Manager: "You'd only be telling stories if your clients aren't good. If your clients were good, you'd be selling performance."
That'll never happen. Here's why.
Let's say you do pitch performance:
Marketing sends emails with performance updates in the subject line
Sales is leaving performance on voicemails
Investment team creates 20 charts showing how you beat your indexes, competitors, etc..
Fact sheets get redesigned
Pitchbooks a makeover
Vibe is " BAM " check out these numbers
Assume this works:
Some prospects email a few follow up data questions
Maybe a few want a quick check the box due diligence call
" BAM " they invest
You've figured it out!
Selling performance works (not)
Markets take a turn....
Your asset class is under pressure
You make a mistake in your portfolio (never happens to the fund manager gods)
Performance is lagging all those indexes, peers, etc!
Marketing cancels emails
Sales is blamed for redemptions
Charts look like the market in 2008 / 2009... they need to be scrapped
Factsheets get redesigned
Pitchbooks as well
Vibe is.. we'll hide until performance is better
But what about those investors who bought your stats?
They are watching your stats daily
They aren't happy...
Maybe you get an email heads up
Maybe you get a quick phone call
" BAM " they all redeem, they're chasing performance only//
🔥 (of a different kind)
Moral of the story?
When you sell your good performance, some investors buy it
But those investors will sell your bad performance
Easy come, easy go
So, you can sell performance, all day long
Hey, it might work
Just be careful what you wish for
Then there's those that tell stories
they build relationships and rapport with the investors
Trust is given by the investor...
People invest with people