Comment: Family Offices, Fund Boutiques und Consultants – Know-how, Events and the “Connecting-the-dots-Factor”

“No consulting without a concept” – so often the frightening response of consultants to inquiries from customers for projects. Justified prejudices or unfounded criticism, that remains to be seen: In this case, the service provider may not be directly accused of not simply wanting to work into the blue, but rather of wanting to deal intensively with customer questions and customer interests beforehand. This fact is often transferable in a similar way when initiating business or in search procedures in the asset management or financial industry: no investment or fund issue without a concept. One side knows or does not know exactly what it is looking for or where the journey should take it. The other side may find it difficult to see the customer problem as their problem. What examples can there be? Which settings appear “inefficient” for both sides? Is there a direction for possible solutions?

Investor conferences – manager selection and “product scouting

Conferences in the asset management industry can perhaps be roughly divided into “exchange of ideas conferences” and “business initiation conferences”, the transitions sometimes appear to be fluid. Conferences, like publications, need to raise sponsorship money to take place. It is not always guaranteed that the “best” vendors are also the ones with the largest marketing budgets, which most investors are aware of, as they do enough of their research. The media partners or the event organizers usually do a good job, since it is often underestimated, how complex bringing together offerer and investor is.

A small percentage of C-Liga sponsors provide “cultural sponsoring”, so to speak so that the entire event takes place. Similar to advertisements, this is widely accepted, an established concept. What can be the positive value of such a constellation? Databases, research, and know-how are available to many investors who attend these conferences. However, certain specialist providers (“fund boutiques”), for example, are drowned out by the information noise of the industry. This does not only apply to classic asset managers, for example but also many offers in the real assets sector (infrastructure funds, etc.) are often only on the radar screen of certain investors by chance.

To pick up on the consulting topic from above: Why are some sales representatives often not interested enough in the investment concepts of the investor? Constructive interjection: If the classic “contacts-contacts-contacts approach” were to be modified, one would get away a little from the classic “tonnage thinking” in the minutes of meetings, the dialogue between sales and investor would often be more efficient and more satisfying for both sides. The question of whether every investor knows exactly what to look for in the broad investment universe in the current low-interest-rate environment will not be discussed further at this point – even if there is a temporary hint of ignorance, an exchange with vendors and professional colleagues at conferences can perhaps help a small step further.

Selection of investment companies – private label funds and fund conception

Fund launch projects need to be administered, supported, and technically “secured”. Regulations change, certain concepts may require different solutions – up to the realization that for certain projects only certain investment companies or certain companies with certain heads and networks should be shortlisted for fund projects. Universal Investment, AmpegaGerling or Union Investment, DWS, and many other companies that can support fund requirements in a wide variety of ways – what is the specialization? How big do I have to be as a fund initiator to build up a fruitful business relationship with these addresses? Are costs sensibly the decisive factor for the selection of providers or can there not be even more decisive factors in the selection?

Typical settings for fund requirements can be: standard funds, the track record is available, own distribution network is available and seed money is not the problem. If an attractive fund volume is moved, the fund initiator can start a fairly relaxed search process for a provider. The alternative option for many fund initiators: special segment (real assets, etc.), project not well thought out (white spots or “craters” in the conception phase), little or no track record, no distribution network – not hopeless if various factors are added positively (network, know-how, internal or external support, perhaps family office in the background for seeding, as an example). Similar discussion points as with concept consulting – the customer does not know exactly what he wants and expects a solution from the service provider, which then perhaps does not have to be the most effective one, because neither time, budget nor other resources are brought into the search process by the customer. According to the motto: “I don’t know exactly what I want, but tell me what it costs”.

Many investment companies, lawyers, consultants, etc. meet from time to time. As spoken by “clients” that they have little or no pleasure in doing so. A constructive solution approach could be: Fund initiator still falls in love with his idea, but it’s budgeted with time and personnel.  If this is not possible, then at least over time one learns the precise distinction between a wish (“My dream fund”) and a concrete goal (fund launch). This need not be viewed negatively. Once a fund initiator has gone through this loose, uncoordinated search process without a result, a new project often involves the concrete deployment of resources with conviction.

Conclusion – communication, conception, networks

It would be presumptuous to say at this point that the phenomena mentioned above would disappear into thin air by any patent solutions. Many of the above mentioned general topics customer – the contractor can be transferred to – consultants, asset managers, lawyers, service providers in the most different industries. In the end, it is all about communication, finding familiar interfaces, conception, and maintenance of know-how networks. Projects (scope, duration, costs unclear by nature – can be partly transferred to investment decisions) will always be drivers for growth and change of industries. In the financial sector, for example, certain “consulting designs”, investment companies, law firms, consulates, and family offices can be regarded as networks of know-how and contacts. On a meta-level, one can perhaps argue that although many players in the industry hold many threads in their hands, they are usually faced with the task of bringing them together in a meaningful way (example: integrated marketing concepts, the conception of multi-manager mandates, fund projects, seed money search, etc.). The search process for the above-mentioned question is not yet complete in other words, what is needed is a suitable concept for the topic: Connecting the dots!


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