Dear Managing Partners,
We know that fund management firms can be insular, particularly in alternatives. Few take the time to consider fully how key stakeholders and counterparties perceive their firm. Perhaps you are different...but then again, perhaps not...
Now is the time to reach out and investigate exactly how the market views you. And if you weren't already convinced, here's just 5 of the reasons why Managing Partners should be taking this more seriously:
Reason 1: Have we got views for you?
A thoughtfully constructed and run perception study allows you to collect and analyse the opinions of all your key stakeholders and counterparties. This should always include a sample of current (and, where possible, past) staff and, dependent on the scope of your specific survey and your aims in undertaking it, should also include investors (including current and past LPs and prospective new investors); peers; portfolio companies; lenders; and other intermediaries and advisors. Each of these groups has valuable information for you, if you will only give them the opportunity to share it.
Reason 2: You can handle the truth.
Properly handled, the process will encourage participants to provide full and frank feedback. In other words, through a perception study, you can get to the truth of the market's views, without the sugar coating. Interactions as part of this process have their sole focus on you as a firm, not a potential deal or fund commitment and can therefore go where other conversations cannot reach.
Reason 3: We all like takeaways.
An effective perception study, properly analysed, should result in actionable takeaways and next steps for those running asset management firms, not just a 100-slide deck of verbatim comments. Dependent on the specific context of your firm and the perception study itself, these can include, amongst others:
- How should we be positioning the firm?
- How should we be addressing succession?
- Should we broaden the ownership of the firm?
- How do our team and offering stack up?
- What are our strengths and weaknesses as a firm?
- Where are the gaps in our organisation?
Reason 4: Unknown knowns, or: you don't know what you don't know.
A perception study can be especially useful in helping Managing Partners answer the questions, what should we be worried about? and how can we continue to grow? In particular, by surveying the views of clients and investors, you can discover what they really need. And probably more importantly, whether they think you are providing it. Maybe your clients and investors are simply looking for a (hopefully slightly larger) new fund of the same strategy as your prior vehicle. But maybe they would be really interested in a new fund from you in a new strategy. Maybe a small cap fund would be well-received and complement your (until now), solidly mid-market focus. Or maybe your clients and investors would be willing to support a strategic move into the private debt space. Or into new geographies. Or entire other asset classes.
All could be new growth avenues for your firm that, but for the perception study, you may never have considered.
Reason 5: Look clever!
Conducting a perception study signals to participants that you are a forward-thinking, institutional and 'smart' firm that cares about their opinions. These are all presumably characteristics you want your firm to be associated with, right?
So there you are, five good reasons why those running and managing alternative asset firms should champion perception studies.
Let's finish with one piece of important advice, which is to use a specialist third party to undertake a perception study. Using an experienced third party will give increased credibility to the whole exercise, will make respondents more likely to participate and provide fuller and franker feedback – and it saves you time.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.