By Chris Gillick
The blog post first appeared on O’Dwyer’s.
Well before a new investment management firm deploys its first dollar, founding partners spend a substantial portion of their time and personal savings on legal fees, technology and recruiting day-one employees. The communications function and timeline can be one of the last boxes to check.
For the reasons explained below, it should be one of the first.
Likely years in the making, a successful start to this entrepreneurial journey begins with an amicable departure from one’s prior gig. For prominent up-and-comers, news of their departure will end up in the trade media. Getting organized on messaging with one’s soon-to-be former employer is crucial, as flubbing this step could kill the startup dream before it begins.
Once on “gardening leave”—Wall Street lingo for a non-compete period—aspiring managers should not only be honing their sales pitch to investors but also mapping out their new organizational infrastructure. “Three people and a Bloomberg” is a dated concept in 2022, and competition for investor dollars only gets more competitive with each passing year.
Beyond the investment team, new managers must secure the services of top-tier service providers favored by institutional investors in the legal, accounting and fund administration verticals. Formalizing the PR and communications functions can be an expensive afterthought. But what many fail to realize is that the brand halo of their former employer will last only so long as they get ramped up. The time to establish a public profile is limited.
Whether emerging managers like it or not, they’ll have to devote time and resources to this function and assign it an owner. (It could be the founder!) Asset management startups are no different from those of any other industry: Every early employee does the job of three people.
In nascent and seasoned investment organizations alike, PR usually falls under the purview of marketing and/or investor relations teams. Barring previous media relations experience, the person in this seat at a startup firm will seek agency assistance as an extension of the organization.
Large agencies and sole proprietors alike can serve this niche audience well. But the best practitioners go beyond a page of impressive client logos: They understand the industry’s wonky terminology, media outlets and centers of influence. It’s those introductions outside the realm of reporters that can really move the needle. This is hardly a job for a generalist.
The right agency partner also understands that its fees at the beginning are coming out of a founder’s personal savings—rather than a formal corporate budget. This dynamic creates a greater sense of urgency to deliver top results and advice—and show the same level of enthusiasm as the founding team. If the agency doesn’t have this level of service orientation in its DNA, keep looking. Practically speaking, managers should also be mindful that the nature of a launch is frontloaded and that agencies might bill more upfront for their time.
An emerging manager’s public debut is like that of any company going through the IPO process: Chances are, it will happen only once, and you only have one chance to get it right.
Savvy new managers know exactly whom they need to reach. Those executing liquid strategies will be focused on the allocator community and bank counterparties, while those investing in privately held assets will be more focused on potential sellers and intermediaries.
Once the audience is determined, it’s time to start planning the outreach, which includes website content, targeted media lists, the core “launch” press release, a letter to a professional network and social media posts. As the firm matures and grows, founders can delegate this responsibility more, but they must be involved heavily leading up to launch day.
Regarding earned media in particular, managers should seek the most eyeballs possible. If the news must be delayed to accommodate the priorities of a top outlet, so be it. Like an IPO, there’s a short time window to take advantage of the spotlight.
Once the hoopla of a launch settles down, the day-to-day blocking and tackling begins: meeting more reporters, setting up a regular social media cadence and planning a conference and event calendar.
Depending on the investment strategy, PR and communications needs and goals will be different. Stock pickers, ETF sponsors and managers targeting retail investors might prioritize broadcast television and podcasts. Private equity firms will need press releases and comms. plan templates ready for every transaction and fund closing. The same goes for venture firms.
Younger firms will take a while to ingratiate themselves into the right routine, but once it’s there, they will be ready to punch above their weight.
Fund managers spend the majority of their professional time assessing return on investment, “value add” and outperforming a benchmark. But applying a similarly linear framework to the PR and communications function can be short-sighted and ultimately costly.
The best investors know that any trade, buyout or venture deal has downside risk, and they work furiously to minimize it. Therefore, agency partners should be viewed not solely as an extension of marketing and fundraising efforts but also as a trusted insurance policy on your reputation when things inevitably go awry.
Sustainable investing franchises can’t be built without sufficient assets, and institutional investors rely on reputation when entrusting their assets to their managers. Viewed in this context, when eight- and nine-figure checks are on the line, an upfront investment in a proper communications infrastructure is one that managers cannot afford to neglect.