Any Pepsi employee can go out and try a Coke. Any GM marketing executive can walk into a Ford showroom they want. They have access to the exact same information about their competitors as any other consumer.
They have access to the exact same information about their competitors as any other consumer. Competitor or not, Dell is capable of reverse engineering HPs devices all day long to understand how their products work (and vice versa).
But in alternatives, a fund manager's access to their competitor's information is severely limited. Sure, for a pretty hefty fee, there are databases that can provide peer performance numbers. And funds are getting more comfortable sharing more general information and insights publicly, so a manager can do some basic diligence on their competitors if they want. But it's hardly the same thing as digging through the data room and interviewing all of the key employees, as an institutional LP would do.
Despite this information gap, managers often still claim that they are “unique” or insist that “no one else does what we do.” Of course, in some cases you may really have a differentiated strategy. But it's amazing how often it is not true. It's pure hyperbole. As a marketing firm, it's something that we unfortunately hear quite regularly.
And…if we hear it regularly, what do you think a specialist portfolio manager hears?
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