There are two aspects to fund management - managing money and raising money. Of the two, the second part is the hardest. I have met many managers with fantastic numbers, who have never raised any money at all. Why? Typically they just assume if their numbers are good enough, the money will come. Sometimes that is true - but rarely.
For me, raising money is more a trust game. Do people trust you with their money? And why should they trust you? Building trust is much easier with face to face meetings - than via zoom. But face to face meetings are time consuming, unless you, the manager, do the hard work. And that is why I am going to New York next week.
But why New York? In midtown Manhattan, you have a huge concentration of allocators and investors where you can walk from meeting to meeting. If you are keen enough and motivated enough, you can get through 20 meetings. This is not possible anywhere else in my experience.
The other thing about NY, and American investors, is that they have a higher tolerance for volatility in my experience. European investors are constantly seeking bond like proxies (market neutral, volatility selling strategies) which I disagree with, as they tend to blow up at the same time, and rarely make the returns to justify the risk they run.
The other thing about face to face meetings is that if you don’t have the confidence to back yourself, then why should anyone else - and face to face meetings are great proof of this, in my view anyway.
You may also be wondering why I am going to NY with so little notice - but this has been always my style. Wait until the markets break your way, and then go meet people. I have been arguing that we are moving to an era of capital scarcity - which makes bonds and equities less attractive. But after a wait of a few years, we have finally had a break out in gold relative to the S&P 500.
And we saw 30 year JGB yields rise, even at the Nasdaq fell 10%. This is novel, but would fall squarely inline with my view of moving to an era of capital scarcity.
These two things combined convince me we are in a new world.
If you are in NY next week, and would like to talk about these things, then drop me a line and I can see what we can do.
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