Predicting Thunderstorms

by Roland Meerdter

Roland Meerdter

Roland will be speaking at our next client conference that focuses on distribution. He will speak about how fund firms can enhance their story for more sophisticated audiences. Click here for more information on attending our conference.

Here is his most recent blog post. Another good read.

Think like a farmer. Opportunities to grow assets under management are often a matter of planting seeds and waiting for a thunderstorm. When the storm arrives, successful managers (that is, farmers) capture the rain, tend their carefully planted gardens and avoid the risks of lightning strikes. When your competition loses focus, becomes complacent and gets hit by the odd bolt, be prepared to take advantage.

With few exceptions, new business being won by asset managers is taken away from other managers, not new allocations from cash. If not driven by asset allocation decisions (from one asset class to another), shifts in money most often come when the incumbent manager stumbles.
Managers must focus on gaining from their competitors’ missteps. To anticipate weaknesses and eventual downfalls, I advise asset managers to take the perspective of sophisticated investors (research/due diligence analysts) when analyzing competitors’ and their own businesses. Look for potential holes. Think about what can go wrong. Anticipate the lightning. For those asset managers who take the advice, benefits are twofold: (1) they protect their own business and (2) they take advantage of those who don’t.

For the full article, click here.