marketing

Asset management opportunity for independents?

Jim Kim — Wed, 08 Oct 2008 12:04:39 -0400

Bloomberg offers an interesting article, suggesting that the woes of the big wirehouses may pose a once-in-a-lifetime opportunity for independent asset management firms. There's a lot of anger out there, and at least some of it is aimed at the big-name investment banks. So it would not surprise anyone if independents made a big marketing push right now, for both customers and brokers fleeing the likes of Morgan Stanley and Merrill Lynch. Charles Schwab and Fidelity--the two biggest RIA platforms--tell Bloomberg they are handling record business right now. But customers just might find out that the service offered at a small firm are not meaningfully different from a big firm. The line between a commission guy and a for-fee guy has been blurring for a while. But that's not anything that some tickets and freebies can't overcome.

For more:
- here's the Bloomberg article
- a view from the adviser trenches. Article

The public is not buying the bailout

Jim Kim — Thu, 25 Sep 2008 12:18:31 -0400

Even as Congress seems to be moving toward a final version of the bailout plan, it's clear that the American public is not buying it. This is how the New York Times puts it: "Americans' anger is in full bloom, jumping off the screen in capital letters and exclamation points, in the email inboxes of elected representatives in the nation's capital." Sen. Barbara Boxer has received nearly 17,000 emails about the plan--almost all opposed. So in selling this to the public, supporters will have to pay attention to marketing what's in it for the taxpayer. All of that remains to be seen. The details are still being hammered out, but the plan will go down easier if there is an equity stake for the government in banks, some relief for mortgage holders and some controls on how all the money will be spent.

For more:
- here's a New York Times article

Hedge fund execs don't think about succession

Jim Kim — Tue, 02 Sep 2008 21:14:43 -0400

A recent survey has found that most hedge funds have done little in the area of succession planning. In fact, less than 30 percent of partners are prepared to deal with the death of a managing partner. Only slightly more than half of the respondents even knew what person or entity will obtain voting rights in the event of an owner's death. Most surveys, including this one by accountants Rothstein Kass, serve a marketing purpose. But this is an interesting result. Overall, about 75 percent say they have no formal succession plans. Hedge fund execs tend to be a confident bunch. The one thing they are not counting on are their own death. These guys are immortal. Right? But I would bet the more established ones have thought this through.

For more:
- here's a FINalternatives article

The real reason hedge funds flock to the islands

Jim Kim — Sat, 09 Aug 2008 08:55:07 -0400

The Cayman Islands are now home to 10,000 hedge funds and other investment vehicles. AllAboutAlpha notes there's one fund for every five residents. The conventional view, of course, is that hedge funds are drawn to such exotic locales because of lax regulatory requirements. But Douglas Cumming of Canada's York University and Sophia Johan of the Tilburg Law and Economic Centre in The Netherlands regressed regulatory characteristics against hedge fund strategies and concluded that there is "no support for the view that hedge fund managers pursuing riskier strategies or strategies with potentially more pronounced agency problems systematically select jurisdictions with less stringent regulations." Instead they select locales based on marketing considerations.

For more:
- here's the AllAboutAlpha article

Related Article:
Cottage industry: Hedge fund directors

Banks bet on stadium sponsorships

Jim Kim — Fri, 25 Jul 2008 08:00:45 -0400

Does Citi Field have the same ring as Shea Stadium? Well, it likely depends on who you are. Mets loyalists may grumble. But for the bank, it's a nice, albeit expensive, marketing move. Business Week notes some think that Citigroup could use the $20 million a year the sponsorship cost in other areas right now. But such deals are currently popular among commercial banks. Citi seems to have paid a premium. Bank of America bought the rights to the Carolina Panthers' stadium in Charlotte for $7 million a year. Other banks paid even less. M&T, PNC and Comerica have also bought stadium naming rights. For banks, such deals amount to a low-cost way to burnish their brands with the public and associate with a professional team. I'd like to see how the ROI is actually measured. There's risk on both sides. Recall the Houston Astros got stuck with Enron.

For more:
- here's the Business Week article

Lending stock to yourself? Why not?

Jim Kim — Fri, 20 Jun 2008 07:24:13 -0400

The creation of all those long/short funds have really made borrowing stock a pain in portfolio. Stock lending has become so hard it gave rise to a weird little black market that spawned some regulatory action a while back. So how's this for an idea: Why not lend stock to yourself? AllAboutAlpha.com writes about Enhanced Index Products Company of Hong Kong, which uses its index fund as a source of stock to create short positions in its hedge fund. The firm sees this as an ideal solution, and is not afraid to use it for marketing purposes. The article notes that the situation is not ideal; there may be cases where there is not enough stock available. The index fund wins because its gets 25 percent of the gross profits from the hedge funds. You can bet we'll see some more firms get creative when it comes to their 130/30 offerings.

For more:
- here's the article

And the top-ranked private equity firm is ...

Wed, 21 May 2008 06:59:56 -0400

Fortune has come out with a list of top private equity firms according to recent fund raising activity, and the big winner is the Carlyle Group. Yes, its mortgage-backed securities fund stumbled, but so did a lot of others. It's buyout and other funds fared well enough, apparently, to earn the top spot. The Blackstone Group, Kohlberg Kravis Roberts, Bain Capital, Warburg Pincus and TPG round out the top six. Out of nowhere: U.S.-based Advent International, which soared to 7th from not even being ranked the year before. It has specialized in European, middle-market type deals. Another newcomer: First Reserve, which came in 10th after being unranked in 2007. It's forte apparently is energy deals.

For more:
- here's the Fortune list

All hedge funds are not created equal

Mon, 19 May 2008 06:59:56 -0400

You would think decent performance would guarantee a long life in the hedge fund industry. But the dynamic has changed a bit. Does this Darwinian environment now require more than mediocrity? That's one way to frame the issue surrounding Martello Investment Management, a $1 billion fund of hedge funds, that has decided to return money to investors because it simply couldn't raise enough money to operate at the level it desired. FINalternatives notes that performance this year had been decent, with fund returns ranging from a loss of 3.2 percent to a gain of 5.6 percent. So it is tempting to call this a failure of marketing. Then again, you would think that they could come up with a business model that could work with a $1 billion hedge fund. That's $20 million in management fees alone.

For more:
- here's the article

And the biggest private equity firm is...

Thu, 01 May 2008 06:59:56 -0400

When it comes to private equity firms, people tend to have a size complex. Private Equity International has just come out with its second annual list of private equity firms based on the amount of money they raised over the past five years. The winner for the second year in a row is The Carlyle Group, which raised $52 billion. Coming in second: Goldman Sachs Principal Investment Area, at $50 billion, which knocked Kohlberg Kravis Roberts--fourth this year at $40 billion--out of that spot. The third place finisher was TPG, at $39 billion. London-based CVC Capital Partners rounded out the top five at $37 billion. The Blackstone Group finished in 10th place, after placing fourth last year.

For more:
- here's a summary
- here's a New York Times recap

marketing

Sponsored by Bowne

Asset management opportunity for independents?

The public is not buying the bailout

Hedge fund execs don't think about succession

The real reason hedge funds flock to the islands

Banks bet on stadium sponsorships

Lending stock to yourself? Why not?

And the top-ranked private equity firm is ...

All hedge funds are not created equal

And the biggest private equity firm is...