While performance and fees can be enough to get managers into a search, institutional sales professionals’ effectiveness during finals presentations can make or break their firm’s chances of winning an institutional mandate, according to new research from Cogent Reports.
“Once you get to that final step, that’s where the interaction with the sales team, the relationship management team and even a portfolio manager can really sway an investment committee to select one manager over another,” says Linda York, senior vice president of Market Strategies International and co-author of the report.
In a finals presentation, an investment committee’s decision often comes down to the comfort level, creditability and personality match with particular presenters, York says.
Asset managers should make sure their sales people have done their homework before meeting with the investment committee. They need to understand not only the particular mandate they are competing for but the culture of the organization and the broader picture of what they are trying to accomplish, York explains.
“When the team is presenting, it’s not just [whether they are] able to articulate a cohesive story with the response they’ve submitted through their RFP or RFI, but also are they demonstrating knowledge of the institutional organization, and what they’re looking to achieve.”
Asset managers should also make sure there are no inconsistencies between their presentation materials and their previously submitted RFPs, York says. Such an error can make the difference between winning or losing a mandate. Demonstrating how an asset management firm’s interests may align with the institutional investor can also help during a finals presentation, Cogent’s research found.
“What makes the presentation and the message to the client really shine is when we shine a light on their circumstances and make it about them and their goals and objectives,” says Maddi Dessner, head of investment solutions for J.P. Morgan Asset Management’s multi-asset-solutions business, in the Americas.
“We’ve moved away from a world where clients are very specific about what they need,” Dessner says. “I think they’re coming to us because they need that guidance.”
That can mean doing research on the front end to be prepared before finals presentations.
It can also be helpful to understand what other asset management firms will be competing for the mandate.
“It’s always relevant to understand what lens the client is looking through to make sure we can clearly differentiate our capabilities,” Dessner. ”It’s not about throwing mud at another competitor. It’s about making sure the client understands what makes us different.”
The most difficult and most important question managers need to answer during finals presentations is how their strategy is different from competitors, said Liz Hecht, founder of Alpha Partners during a September 2018 FundFire webcast.
“Many investment firms say they are different for exactly the same reasons,” Hecht said. “It’s important to understand the difference between strengths you likely share in common with your competitors, and genuine competitive advantages.”
“A prospective client in a finals presentation doesn’t want to know why you belong on the field, they want to know why you deserve to win,” Hecht said. “A finals is a competition with real money on the line. You cannot afford to look and sound like everybody else.”
Managers should make sure they are reading the room to notice whether someone has a question that they have not articulated, says Dessner, of J.P. Morgan.
“Give the client an opportunity to ask questions,” Dessner says. “Don’t turn into a talking head that’s going to ramble on without giving the client an opportunity to interject.”
Managers should also consider which team members they bring to the presentation. If the firm plans to offer an in-depth piece of analysis it can be helpful to bring the person who prepared that to the presentation.
“I also think it’s super helpful to have the people that client will be working with in the room,” Dessner says. “It’s a very strong statement to say, ‘this is the person that will be at the quarterly investment meeting; this is the person who will answer the phone when you call.’”
If an asset management firm finds that it is losing a lot of mandates at the point of finals presentations, it can be helpful to conduct a win-loss analyses to figure out what went right or wrong, says Cogent’s York. Going back and asking the investment committee why they were not selected can help manager document and track what they might be doing wrong.
“In general, we see the winning firms demonstrating thoughtfulness at their investment process, and skilled presenters that can sell a very strong connection with that investment committee,” York says.
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