In This Issue:

• Parker Point Capital Announcement
• Improving Email Marketing Campaigns - Gabe Berkowitz
• Public Pension Plans Private Equity Fund Outlook - David Wilkinson
• Location, Location, Location - Investors Seek Managers Close to Home - Micah Jacobs
• Hot New Mandates

An effective e-mail marketing campaign can help fund marketers identify prospects, introduce funds to investors, improve road trips, and eventually secure allocations. Increasingly, investors have mentioned to BHA analysts that they often prefer fund managers to make initial contact via e-mail. So it seems pertinent to discuss some tips and techniques that help make an e-mail marketing campaign successful.

Brand E-mails

The first tip for preparing an e-mail campaign is to establish the “branding.” This is often overlooked. However, before recipients even open the message, they see the sender. To create familiarity with the receiver, it is highly recommended to make the sender recognizable. That is, choose to use either the name of the company; otherwise make the sender a person who the reader can easily follow up with. Whichever you choose, it is important to consistently use the same sender throughout the campaign. Creating familiarity with your target audience will lead to e-mails being opened and read. 

Inform Concisely

Giving an e-mail an appropriate and consistent subject is another vital practice in creating an e-mail campaign. Many email providers only allow 45 characters for the subject; the program cuts off any additional characters. Therefore, craft a subject that is concise but informative; in a few words, it should clearly convey the purpose of the e-mail. Using lengthy subjects increases the likelihood that your e-mail will be ignored or lost in the recipient’s crowded inbox.

Establish Continuity

Send regular updates to your list. If prospecting for an upcoming marketing trip, it is wise to send out requests for meetings at regular intervals. If you are sending out a monthly performance update, schedule the mailing for the same day of every month. By sending e-mails at regular intervals, recipients will begin to expect their arrival. Also it is important to note that the best times to send out information are either at the beginning of the day or right after lunch. Avoid sending e-mails after 4 P.M. (scheduling delivery by time zone) or on the weekends.

Build Investor List

Finally, build your distribution list at every potential opportunity. Consistently adding new targets to your contact list is the best way to build brand recognition and identify new prospects. Here are two simple ways to expand a distribution list: first, after every conference, add the names of the attendees to the list; second, have everyone at the fund add one-off names to the list that they come across during their day-to-day work.

A well-conceived e-mail marketing campaign can be a highly effective tool for funds looking to raise assets in the current marketing environment. With many investors looking for fund managers to make initial contact through e-mail, funds that distribute a regular, consistent message are likely to succeed in identifying and reaching out to potential fund investors via e-mail marketing.

With the Dow Jones Industrial Average recently hitting a 52-week high, signs of a healthy economy are certainly present and many investors have begun to step off the sidelines and reinvest in alternatives. Among them are government pension plans, some of the largest institutional players in this market. They are reassessing current asset distributions and how to weight portfolios in the coming years. Because pension plans, especially those designed for employees in the public sector, typically have long-term capital appreciation goals, private equity is often a desirable investment structure.

In the past five weeks, BHA analysts have confirmed this sentiment during conversations with government pension plans in the U.S. and Europe. By a margin of almost 2.5:1, these pension plans expressed an interest in private equity over hedge funds. But why is this, and what types of private equity funds are currently most appealing?

The answer to the first question relates to the nature of private equity investments: they provide strong risk-adjusted returns and require a long-term investment horizon. One may think that a long lock-up is unattractive, but government pensions, unlike other institutional investors, take a long-term approach to investing. They are more focused on reducing overall portfolio volatility to decrease risk. These goals make an investment in private equity an obvious choice.

So what types of funds are government pensions most interested in at the moment? The two most popular strategies since October 1 are buyout and venture capital. More than 80 percent of the investors interviewed mentioned an interest in buyout, while nearly 60 percent thought venture capital attractive. An obvious reason why these strategies are appealing is their inherent goal of investing in the community. Buyout funds typically focus on mergers and acquisitions, which create jobs and increase economic activity. Venture capital funds focus on providing start-up capital to entrepreneurs who have a solid business model but lack the financial means to get a company off the ground. Both of these strategies directly support employment and, ultimately, economic growth. [Edit to eliminate double negative.]

In the wake of the economic meltdown, investors are eager to sustain the recent economic surge. Instead of focusing on profiteering, which may have been the case prior to “the great recession,” it seems that many investors are now considering how their capital can be put to work not only to provide solid returns but also to boost economic activity, increase employment, and facilitate a return to prerecession economic prosperity. As a result, BHA analysts anticipate that demand from government pensions for buyout and venture capital funds will continue to increase.

Institutional investors are changing their due diligence processes and requiring more on-site meetings with fund managers prior to investing. While this change is due in part to the poor performance of many fund managers in 2008, it is largely due to the unprecedented number of highly publicized fraud cases in the alternative investment community. Given the magnitude of the crimes, institutional investors are being more careful and cautious, and requiring more initial meetings, before making allocations.

A private bank with offices in continental Europe, London, and New York has told BHA that it is looking for funds that have offices in the same locales because it would be logistically easier to conduct regularly scheduled meetings with managers. A large European wealth advisor has expressed a preference for Europe-based managers. And many U.S. investors have indicated that they are searching for managers based in the states. A wealth advisor based in the Southwest stated its preference for managers located in that region or on the West Coast; other investors want fund managers located on the east coast or in London.

A recent article in Bloomberg detailed the challenges facing Australian managers because they are distant from dense financial centers such as New York, London, and Geneva.¹ Many Australian fund managers that hope to secure Western-based investors are beginning to set up offices in London and New York.

Additionally, many investors want more face time with managers even after selecting funds. A family office in New York said it now requires on-site quarterly meetings with its managers. As a result, the firm is looking at managers based near its offices in Manhattan.

These examples are representative of a current trend: institutional investors looking close to home for fund managers. Those managers with offices in major financial centers will greatly increase their chances of receiving allocations and increasing assets under management.

¹ Bloomberg, “’Tyranny of Distance’ Hampers Australian Hedge Fund Revival”, November 6, 2009,

© 2009 Brighton House Associates, LLC. 4 Mount Royal Ave., Suite 140, Marlboro, MA 01752

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