Sorting the Best from the Rest: How Do We Spot the Next Big Thing?

Thoughts from Stuart Alexander on the challenge of identifying the next big fund manager – and what makes a manager successful, from strategy to marketing.

The other day I met up with a couple of Distribution grandees, Steve Sullivan at Capital Strategies and, later on in the day, Luke Reeves at LGBR. Two firms that we work with on behalf of two of our funds, Calamos and Semper. During the course of the conversations, the challenge of identifying the next “unicorn” or star team came up, as well as the question of when a fund manager approaches you, how you work out whether to work with them? It’s never easy to spot them, we concluded, but it’s amazing when you do.

When GemCap started in 2009 we too were a third-party marketing firm with our sole business focusing on raising assets for fund managers, and we enjoyed some notable success as well as a fair share of failures. Identifying the winners was never easy and at times the decision wasn’t always the best one. Back in January 2009 a small and totally unheard-of business called TwentyFour Asset Management approached us to seek our help in getting themselves into the funds business. They wanted to launch a closed-ended and Cayman listed structure to sell into the UK intermediary market. We quickly told them the structure and domicile was not going to work in a post financial crisis world where transparency and liquidity were the buzzwords of the day. We quickly convinced them that a UCITS Fund with daily liquidity was going to be the structure that would work for them and they thankfully agreed. When I first met Ben Hayward and Mark Holman, Partners at TwentyFour Asset Management, as well as the rest of the team, I was immediately impressed with their knowledge but then again, it was their job – so no real surprises. However, the decision to work with them was based on some fundamental and very basic traits that meant we knew we could work with them. Their passion and energy were there for everyone to see. They presented the asset class, RMBS, in an evangelical way but also with education at the core of the proposition. They recognised that the market was still smarting about RMBS but they realised the market was confused between US and European RMBS. After all, RMBS was synonymous with the collapse in credit markets globally. So, the education and training for the potential investors began in earnest and before too long we had quite a following, and the rest, as they say, is history. Ben and Mark have continued to grow their business and we are delighted to be part of their history.

But why did we choose them over the others who were knocking on our door at that time? What caused us to put our faith in them? I will let them tell you why they chose us…

The reality is never simple, as ultimately the final decision to take on TwentyFour Asset Management was based on a combination of factors and probably the biggest factor of all was “gut”. As is the case with many decisions, it was backed up with some pretty solid factors. Namely: track record, experience, articulation of the story, commitment to getting the story out there, passion and above all a differentiator that would resonate with investors. Mark and Ben were very keen to be the noisy neighbours in the city and they went about with great professionalism. Content was prolific and relevant. They provided regular updates both online and face to face. Group meetings started with 4-6 people; they now have 4-6 hundred people!

So, what do we say to potential managers and how do we decide if they are the next big one? We always start with the distribution strategy and what are they going to do to raise assets. If the strategy is non-existent, then the conversation is a short one. If they are keen to get out there and engage their sales operatives, either in house or through a third party marketing (“TPM”) firm, then our interest is raised. From there, we start to explore the commitment to go on the road, do webinars and, in the modern world, virtual meetings. Also, the creation of updates for websites and social media, which we believe are imperative in the modern online world.

The marketplace doesn’t want longwinded documents that tell you what you already know – they want to see opinion-forming pieces with updates that are relevant. They need to engage with lots of info, but not to the point that it is boring to a new observer. It’s not easy to build a story at times but with a little bit of practice they can get there. Remember: your mission is to inform, educate and to a certain extent entertain the audience. Above all, make the updates regular, as once you start you need to continually engage to gain more regular followers and retain your existing audience. Own the space, become the authority – or at least someone who the market will refer to and in particular the so-called “influencers” in our market. There are several out there. The likes of Mark Dampier, Jon ‘JB’ Becket, Richard Philbin and Bella Caridade-Ferreira in the UK all have great content and comment on many aspects of the industry. If they like what you post, then they may feature it on their next update. Also follow journalists and see what they are writing about. When they are looking for content, they will seek you out. If we see all of this, or at least a willingness to embrace the ‘marketing’ of themselves, then TPMs are more likely to get more interest and, as a result, find investors.

When it comes down to it, the values of your business will align to a certain extent with the investors and with those who are promoting you. It is not always about money, although clearly if a TPM doesn’t think they can raise any assets then it doesn’t matter about your values but the commercials. Having said that, they may help you but in a different guise if they see it as a slow burn and will monitor the performance etc..

In short, get busy and dive into promotion with as much enthusiasm as possible, for as I have said many times before: ‘If you build it, they won’t come’. You’ve got to go and get them!

In other news...

IMPORTANT INFORMATION

You must submit your agreement before access to the site can be granted. Important information regarding our Cookie Policy can also be found here

SCROLL TO READ

October 2022

 

This website is directed at institutional clients and individuals who have taken appropriate professional advice, who possess the necessary experience, knowledge and expertise to make their investment decisions and properly assess the risk that it incurs.

Gemini Capital Management (Ireland) Limited (“GemCap”), trading as GemCap, is a limited liability company registered under the registered number 579677 under Irish law pursuant to the Companies Act 2014 which is regulated by the Central Bank of Ireland, reference number C155302. Its principal office is at Ground Floor, 118 Rock Rd, Booterstown, Co. Dublin, A94 V0Y7 and its registered office is at 7th Floor, Block A, One Park Place, Upper Hatch Street, Dublin 2, Ireland.

GemCap acts as management company and global distributor to GemCap Investment Funds (Ireland) plc (“UCITS”).

GemCap Investment Funds (Ireland) plc is an umbrella fund with segregated liability between sub-funds incorporated as an investment company with variable capital registered under the registered number 485081 under Irish law pursuant to the Companies Act 2014 and authorised by the Central Bank of Ireland, reference number C67292, pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (as amended) ), having its registered office at 7th Floor, Block A, One Park Place, Upper Hatch Street, Dublin 2, Ireland(“the Fund”) .

The contents of this site have been prepared solely for information purposes and is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. GemCap and the Fund does not give or make any guarantee, representation, warranty or other promise or confirmation (whether express or implied) as to its accuracy or completeness.

 

Risk Warnings

Please remember that the value of investments and the income from them can fluctuate (this may partly be the result of exchange rate fluctuations) and you may not get back the full amount invested. Past performance may not a reliable guide to future performance. A comprehensive list of risk factors is detailed in the Prospectus and the key investor information document (“KIID”) and an investment should not be contemplated until the risks are fully considered. The Prospectus and KIID can be viewed at www.geminicapital.ie

GemCap does not provide financial, investment, tax or any other professional advice in any way and none of the information on this site should be construed as such. None of the information contained on this site constitutes an offer to buy or sell or a solicitation, recommendation, invitation by or on behalf of GemCap to buy or sell any security, product, service or investment. Any opinions expressed on this site do not constitute investment advice and independent advice should be sought where appropriate. The view and/or opinions expressed by GemCap through this or any other platform, may be subject to change.

The shares in the Fund have not been and will not be registered under the US Securities Act of 1933 (the “1933 Act”) as amended or the securities laws of any of the states of the United States. The Shares may not be offered, sold, transferred, pledged or delivered, directly or indirectly, in or into the United States or to or for the account or benefit of any US Person except pursuant to an exemption from, or in a transaction not subject to the registration requirements of the 1933 Act and any applicable state laws, nor in any jurisdiction in which the Fund is not authorised to be publicly sold. The Fund is available only in jurisdictions where their promotion and sale are permitted.

The information contained on the website may not be redistributed directly or indirectly to any citizen or resident of the United States or any other jurisdiction where its distribution may be restricted by law. It is the responsibility of persons accessing the website to ensure compliance with the above.

 

Disclaimer for Investors in Switzerland

The Fund and its sub-funds, Calamos Global Convertible Fund and Third Avenue Real Estate Value Fund has been approved by the Swiss Financial Market Supervisory Authority FINMA (“FINMA”) for offering to Swiss non-qualified investors.

This website may contain advertising.

In Switzerland, the representative is ACOLIN Fund Services AG, Leutschenbachstrasse 50, CH-8050 Zurich, whilst the paying agent is Banque Cantonale Vaudoise, Place St.-François 14, CH-1003 Lusanne.

Swiss investors may obtain free of charge from the representative in Switzerland, the relevant fund documents, namely the prospectus, the key investor information documents, the articles of association, as well as the annual and semi-annual reports.

Past performance results are no indication of future results. Issuance and redemption commissions are not included in the performance figures. Performance results referring to a period of less than twelve months (year-to-date-performance, start of investment fund within the last twelve months) are no reliable indicator for future results due to the short comparison period.

 

Additional information for Qualified Investors in Switzerland:

The below-mentioned investment funds, which are also disclosed on this website, are neither registered with FINMA nor under contract for representation to Swiss investors. These investment funds may not be distributed neither to Swiss non-qualified and qualified investors nor exclusively to Swiss qualified investors:

 

GemCap Investment Funds (Ireland) Plc

Atlantic House Defined Returns Fund

Atlantic House Global Defined Returns Fund

Atlantic House Total Return Fund

Atlantic House US Enhanced Equity Fund

Atlantic House Uncorrelated Strategies Fund

Calamos Global Convertible Fund

Calamos Growth and Income Fund

Causeway Defined Growth Fund

GSI Global Sustainable Value Fund

GSI Global Sustainable Focused Value Fund

London & Capital Global Balanced Fixed Income Fund

London & Capital Global Conservative Fixed Income Fund

London & Capital Global Defensive Equity Fund (this Fund has terminated and accordingly, Shares in this Fund are no longer available for investment)

London & Capital Global Growth Fund

London & Capital Global Growth Fixed Income Fund

London & Capital Global Star Equity Fund

London & Capital Global Balanced Fund

London & Capital Global Equity Opportunities Fund

Principal Asset Allocation Fund

Semper Total Return Fund

TEAM International Equity Fund

Third Avenue Real Estate Value Fund

 

Legal

This GemCap website and material contained herein (including information from third parties) is provided ‘as is’, without any representation or endorsement made and without warranty of any kind whether express or implied, including, but not limited to, the implied warranties of satisfactory quality, fitness for a particular purpose, non-infringement, compatibility, security, completeness and accuracy.

By entering this site, you acknowledge and agree that the use of this site is at your own risk and to the extent permissible by applicable law, in no circumstances, including (but not limited to) negligence, shall GemCap be liable for any direct, indirect, incidental, special, consequential, or punitive damages, losses, costs or expenses nor for any loss of profit that results from the use of, or inability to use this site or any material on any site linked to this site (including but not limited to any viruses or any other errors or defects or failures in computer transmissions or network communications) even if we have been advised of the possibility of such damage. In addition, no liability can be accepted by GemCap in respect of any changes made to the content of this site by unauthorised third parties. All express or implied warranties or representations are excluded to the fullest extent permissible by law. We do not warrant that this site does not infringe any intellectual property rights of third parties.

No data transmission over the internet can be guaranteed as totally secure. Whilst GemCap strives to protect such information and every effort has been made to implement security protocols, in line with relevant legislation to ensure safe processing and storage of any data transmitted, we do not guarantee and cannot ensure the security of any information which you transmit to us. Accordingly, any information which you transmit to us is transmitted at your own risk.

The GemCap website is not a substitute for independent professional advice and users should obtain any appropriate professional advice relevant to their particular circumstances.

The information on this site is issued by GemCap.

 

Cookies

If you use the internet quite a bit, there’s a good chance you’ve heard of cookies.

But what are they?

Also known as HTML cookies, tracking cookies or magic cookies, these tiny files are automatically downloaded by your computer when you’re browsing online. Don’t worry – they’re perfectly safe. But we’d still like to take a moment to explain what cookies do, which ones we use and how to remove them – if you really want to.

Are Cookies Safe?

Yes, cookies are safe. The information they collect is completely anonymous. We never, ever, collect personal information using cookies. What’s more, cookies are not harmful to your computer, they take up minimal space and they can be removed with just a few clicks.

GemCap’s Cookie Functionality

  • Cookies provide enhanced functionality and speed to our site
  • These cookies help us to recognise your computer when you visit Gemini-Capital.ie and enable us to improve your visits to our website
  • Cookies assist us in identifying what kind of visitor/user you are, for us to provide you with the most relevant content

How Can I Remove Cookies?

Most computers are set to download cookies automatically, so if you’re happy with everything you’ve read, simply carry on as you were. However, if you’re at all concerned about having cookies on your computer, deleting them is simple.

Show me how to remove cookies

Likewise, you can also change your computer settings so that it won’t download any more cookies.

Show me how to change my cookie settings

The information on this site is issued by Gemini Capital Management (Ireland) Ltd, which is registered in Ireland No. 579677. The registered address for the company is 7th Floor, Block A, One Park Place, Upper Hatch Street, Dublin 2, Ireland.

For further information on our use of personal data collected and stored by the firm and its approved vendors, please see our Data Protection Statement, which can be found in the “Our Policies” section on this website.