Winter 2009
Jump Start the New Year 

The investment management industry has been forced to do more with less. Organizations are struggling to stay on top by expanding product offerings and delivering Alpha, while remaining lean. At A.S.A.P., we are no different. We acknowledge the need to be innovative and cutting-edge in our approach to database management in these difficult times. Our team of database experts is constantly enhancing our process in order to provide world-class execution for our clients. To that end, we are excited to announce the 2010 launch of enhanced technology and new optimized automation tools.

We hope you enjoy this winter issue of our newsletter, which covers a range of topics from the new GIPS standards to possible future regulation of the hedge fund industry. We also feature an article highlighting ways to strengthen your sales approach and increase closing ratios.

All of us here at A.S.A.P. would like to take this opportunity to thank our readers, clients, and industry experts, all of whom have helped us make 2009 a year of growth and success.
 
We wish you a very happy holiday season and prosperous New Year!

Strengthening Your Sales Approach

Recently, a colleague requested I share one of my favorite quotes.  Several trusted standbys came to mind; however, I submitted the following: 

"Success is peace of mind as a direct result of self-satisfaction in knowing that you did your best to become the best that you are capable of becoming
- in all areas of life." ~John Wooden

Part of why I love this quote is why I love being a part of the investment management industry.  It's an environment in which success is a constant goal, and the performance bar, in a number of respects, is set incredibly high.  To be the best, the professionals within this industry know it's necessary to continually sharpen their skills and to do whatever is needed to ensure they make a difference for their clients, their company, and themselves.  Below I offer suggestions to help strengthen your sales process, increase closing ratios, and better your success.  My philosophy is to BE REAL. 

�  Be sincere in your communications with others. 

�  Be interested in what people say.

�  Be genuinely attentive to people's comments and concerns - listen.

�  Be interesting - know what it is you do well, and why you do it well.

�  Be passionate - show that you enjoy doing what you do, and that you are reliable and trustworthy. 

Buyer's seat ~ Put yourself in it

�  What added value will you bring to each exchange?

�  What challenges does your audience face?

�  What would you be doing/focusing on if you were in their shoes?

�  Why would the buyer want to "buy" from you?

�  How can you be the solution for them?

�  How will you go about building trust? 

Early preparation

�  Do your homework on your audience.

�  Define meeting objectives.

�  Create list of probable questions, both to answer and to ask.

�  Use a checklist - ensure all material needed is compiled, and meeting details are covered.

�   Know your "story." 

Rehearse

�  Schedule a preparatory meeting to practice your story.

�  Know everyone's roles.

�  Discuss a list of probable questions - who will answer which questions?

�  Rehearsal.

�  Focus on timing and content (are you delivering what they need to hear to make a decision?).

�  Polish delivery.

�  Evaluate each other; rehearse again. 

Engage and relate to your audience

�  Build rapport:  understand the WIIFM (What's in it for me?) factor.

�  Share a story that connects to your topic.

�  Personalize - use individuals' names and their firm name - show you are talking about them versus at them.

�  Encourage interaction - pose one or two questions near the beginning to promote dialogue.

�  Share what you know about your audience - confirm accuracy. 

Ask open-ended questions...and listen to responses, comments, and concerns

�  What are issues you are addressing?

�  What changes have you made to your portfolio/investment approach during the past year? 

�  What are the top three attributes you look for when selecting a manager? 

Leave with a follow-up plan

�  Remember to ask for the business (or next meeting).

�  Be the first to thank the person/audience for their time.

�  Send a personalized follow-up letter - reference something you discussed in the meeting.

�  Provide any promised follow-up information in a timely manner.

�  Add meeting details to your CRM system.

�  Meet with your team to debrief. 

Do your best to BE REAL, and may it add to your peace of mind. 

Regulators to Shine Spotlight on Hedge Fund Industry

Historically, the hedge fund industry has operated in relative secrecy and with little regulatory oversight.  As a result, the public is generally unaware of the inner workings of hedge funds and only hears about failures and scandals.  The federal government, while more knowledgeable about the industry, has allowed hedge fund managers to operate outside of the stringent regulations to which other investment managers are subject to. 
 
While the current attitude of regulators is the closest thing to the concept of laissez faire found in today's society, pending legislation will revolutionize the hedge fund industry, as we know it.  The current H.R. 3818 bill, recently passed by the House Financial Services Committee, requires hedge funds with assets under management of $150 million or more to register with the SEC and report assets under management, the use of leverage, counterparty credit risk exposure, trading and investment positions, trading practices, and anything else that the SEC might determine necessary to assess systemic risk and protect investors.  In addition, the pending bill will require the SEC to update accredited investor criteria on a regular basis, which will significantly alter the investor base. 
 
The most obvious effect of the proposed increase in regulatory oversight of the hedge fund industry will be increased costs for managers; hedge funds will either have to hire outside contractors or additional employees to maintain the records required by the SEC.  Of greater concern, however, is the possibility that regulators will enforce rules regarding the amount of leverage hedge funds can use.  The abuse of leverage has contributed to economic crises from the Great Depression to the massive insolvency of financial institutions in 2008 and was a primary catalyst for the collapse of the Russian ruble and explosive failure of now-defunct hedge fund Long Term Capital Management in 1998. However, new rules with regard to the use of leverage will undoubtedly alter the way managers attempt to generate alpha, with unknown long-term consequences for the industry.  Another area of concern arising from the pending regulatory legislation relates to the likelihood that hedge fund managers will be required to be much more transparent with regard to fundamental trading and investment positions.  While the revelation of trading positions will increase the ability of regulators to limit abuses in the financial markets (e.g., price manipulation and insider trading) and prevent fraud such as that perpetrated by investment advisers like Bernie Madoff, altering the principal operations of hedge funds has the potential to affect returns dramatically and reduce the number of viable investment vehicles available to pension funds, insurance companies, funds of funds, high net worth individuals, family offices, and other investors.
 
The final form of hedge fund regulation is, as yet, unknown.  However, what is certain, is that reform is imminent, and the new openness of the industry will have important long-term repercussions for hedge fund managers and investors alike.  

ManagerQuest Client Corner