Comment: Fund Boutiques & Public Relations

“You can fool all people some time and some people all time, but not all people all time” (Abraham Lincoln). A president does not have to be so wrong in his thoughts, which in this case can also be applied in part to public relations (PR) and asset management. Many independent asset managers or domestic and foreign fund boutiques employ their staff in PR or use external service providers.

Conflicts are sometimes pre-programmed, sentences such as: “I can’t buy anything from publicity alone to “With this article, we will increase the sales of fund x” underline that public relations work is often under or overestimated by the client. What are the reasons for this? What can an independent asset manager realistically expect in addition to “normal” market communication?

PR – service of capital investment companies

Many independent asset managers have launched their funds with investment companies such as Universal-Investment, LRI Invest, or AmpegaGerling. All of these investment companies, and of course many other competitors as well, maintain PR departments. Press distribution lists are maintained and used. Fund information, press conferences, specialist publications – all these communication instruments promote the CISA product range and generate a constructive “background noise” in the market.

Comparable to the press work of associations such as the Association of independent asset management (VuV) and the Federal Association of German investment companies. Apart from the use in the media range parts of these arrangements or contact causes (among other things also investor questionings) find use in the selling range of the societies. Many private label fund initiators also like to use the services of these service departments.

Special case – communication and the fund initiators

Independent asset managers use PR support for their market presence with internal or external assistance. The critical factor here is often the size of the fund and of course the product quality (keywords: performance, processes, relative comparability). If the fund is small, the manager unknown, and the performance temporarily unsatisfactory, PR work often appears expensive and inefficient. Market adjustment effects often clarify the situation.

With a stable inflow or stock of funds, many independents think about long-term image cultivation, positioning themselves. Media and investors are possible target groups. Many “medium-sized” fund initiators (including foreign fund boutiques when entering the market) see PR as an additional component in addition to the classic function (press, media, perception, etc.), which can point more in the direction of the investor. Perhaps three potential myths in the industry could be discussed more intensively:

1st PR myth: “We turn water into wine!

Internal and external PR specialists, including the employees of KAGen, cannot work miracles: a fund with a sustained poor performance can be promoted PR-like for a long time with a lot of budget input, but in the long run media and investor interest disappears. This is by no means a fact that is clear to all fund managers or independent asset managers. An additional aspect of this can be that one formulates expectations, which cannot fulfill these so to the media. If an article, a press release, announcement (advertisement, the transition to PR often flowing) does not find approval with media or investors, also the fund initiator should possibly ask himself the question: Do I have at all products or contents to offer, which can arouse target group interest? Many PR professionals can only work with what offers “communication substance” in the long term.

2. PR myth: “Pure product advertising interests the investor!

The PR industry in general (media, consultants, employees) lives in every industry from the fact that one does not know exactly what is real and what is not. Similar to the alleged statement of Henry Ford regarding the topic of advertising, in the following sense: “I know that 50% of advertising expenditures are wasted, unfortunately, I do not know which 50% it is”. It is a fact that advertising expenditures have a benefit, one can consider them as a form of cultural sponsoring, especially concerning the media. Articles, advertisements, special supplements, events – all activities that advance the industry in general and promote communication. The situation can become critical if the interest of the industry for the industry is confused with the news needs of some investor groups. Information overflow – often it is more likely to be covered than to read extensive product promotion articles.

3rd PR myth: “PR and sales have nothing to do with each other!

Here, too, opinions differ widely, especially in more owner-managed companies. Many people appreciate a clear, traditional press work for itself genome-men already very highly, others put a small finger in the wound: If the selling does not run, the PR-budget must be shortened. Often this attitude is accompanied also by the opinion that PR-articles represent the ideal Teaser instrument for investor contacts, so to speak the efficient and economical possibility for the generation of marketing material. If content, quality, performance, etc. keep their promise, then this view does not seem completely absurd. For “small” companies it seems to be ideal if the internal or external PR support lives this philosophy. Counter-example: There are supposed to be PR people who have never spoken to an investor before and who, moreover, may not be interested in direct dialog in terms of content.

Outlook – opportunities for business developers

The discussion about myths or supposed myths in the industry can offer a lot of potentials. The investment companies that manage to direct an optimal “concert” in the marketing mix (e.g. PR and sales components) will attract more interest from independent fund initiators. The PR-specialists, internally or externally, which can signal fund initiators plausibly, which you can take up topics actively – ideally technically independently investment-relevant information to prepare (specialized articles, inquiries, etc.) – will be very in demand. Independent asset managers are subject to great market pressure and are naturally natural business developers. Consequently, they can follow a train of thought well: Public Relations should serve the long-term positive positioning in the public and can actively support sales!


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