For many, the pandemic has been a story of compromise and make do. As the world shifted to remote working overnight, the lack of faceto-face interaction made day-to-day activities in some industries difficult. Reliant on networks and meetings, early on, fund allocation seemed an area likely to fall victim to Covid-19.
The reality, however, has been different.
Despite challenging conditions, in many ways, the industry has expanded. In spite of lockdown, connections between managers and allocators have continued to flourish with thousands of hours of meetings being held in new work-fromhome environments.
With physical meetings and conferences being put on hold, the industry has had to find new ways to reignite activity and match allocator capital with investment strategies. The key to success has been combining human investor relations expertise with the tools and data already at our fingertips.
By harnessing technology to enhance rather than replace the human touch, investor relations teams around the world have been able to use information to help managers and allocators understand how to connect with the right partners.
The world of capital introductions is not a simple self-service model like price comparison websites: while data and algorithms are vital in the initial identification and intelligent matching of manager and allocator preferences, the human touch is key to leveraging information to ensure that clients receive the best results.
With the end of lockdown in sight, the prospect of a transition back to a more familiar way of working will inevitably start appearing in managers’ and allocators’ diaries, and face-to-face meetings and physical conferences will become a real prospect.
While the knowledge that we will soon reclaim a more normal working life is exciting, ‘the great work from home experiment’ has been invaluable in teaching us important lessons in how to work more effectively and drive results. We have seen significant benefits to capital introductions under lockdown which we think will endure once the pandemic subsides:
- With complex requirements and significant amounts of capital at stake, trust in a platform and the assurance of a team are invaluable. Holding informal meetings such as virtual ‘coffee chats’ for managers and allocators after matching on paper is an effective and informal means to build relationships and discuss how to work together. These meetings recreate a familiar and comfortable work setting that do not require significant travel or time investment, yet the data and expertise that underpins the meetings more often than not generate a positive outcome.
- For smaller managers, the shift to virtual working has had its benefits. Where before, some may have felt they were fighting for attention in a crowded room, the pandemic has afforded high-potential emerging managers an audience with previously difficult-to-access allocators. A more equal and less-biased approach has emerged where managers are selected based on strong figures and track records, rather than relying on existing networks and ideas.
- Enriching managers’ sales funnels with data and analytics has also proved vitally important. Seeing which pieces of content caught the eye of allocators or how firms are interacting with their profile helps users to adapt their strategies, allowing managers to generate the best results and streamline their sales processes.
It is more likely than not that the outcome of the return to work in the alternative funds industry will be a hybrid model in capital allocation. While there will be physical meetings as we had prepandemic, the industry will be more reliant on intelligence derived from platforms to match need and requirements to enhance the due diligence process.
The industry will also use insights taken from content marketing to understand the ideas that are gaining interest and how to increase engagement with prospective clients. While some meetings will no doubt return to taking place physically, in many cases, it will make sense to continue meeting virtually, armed with vital data and insights, to save time and costs in a format that the industry has quickly grown comfortable with.
These benefits have longevity and will extend far beyond the pandemic. Many of the working practices developed over lockdown have been to the benefit not the detriment of investor relations and have afforded managers and allocators more flexibility, greater efficiency, and the means to expand their immediate networks. We foresee that at the centre of this hybrid model will be human curators: investor relations teams who manage these large data sets, derive insights and advise managers and allocators to deliver the best outcomes.
Humans will be instrumental in maintaining and building these relationships in the virtual and physical realm. With so much information at our disposal, human guides who not only understand the data but also managers’ and allocators’ individual businesses will be essential to match requirements and free-up their clients’ time to allow them to do what they do best.
While we have moved to a virtual working world, humans are more important than ever and working with a centralised community with unprecedented access to data and insights will be critical to delivering alpha.
This article was originally published in the AIMA Journal Edition 125, March 2021