Asset managers have often faced hurdles on the road to raising Capital. Finding allocators and gaining their attention is challenging and expensive. Managers spend valuable time and energy hiring third party marketers, updating pitch decks, and courting prime broker relationships.
Managers do all this work, hoping that key vendor relationships will help raise seed capital and propel the fund forward. The truth is, it's hard to stand out in this highly competitive landscape filled with nuanced relationships, even for the top-ranked funds.
In AIMA's 'Making It Big' Report, which highlights critical insights on capital introduction and fundraising, the data found that, on average, funds spend 11% of their management fee on marketing expenses. Of those surveyed, only 4% of the emerging manager group sourced their last investment from cap-intro versus 25% of the $500m+ AUM managers.
For institutional allocators, finding the top alternative investments has been just as complicated an endeavor with a myriad of data inputs from stakeholders, investment consultants, advisors, research, and committees. The AIMA report confirms this challenge: "the lack of comparable data and the manual nature of the due diligence process is a major challenge to the allocation process for those hedge funds that manage below $1bn."
Considering these challenges for allocators, how do funds maximize their marketing spend and provide ongoing data and intelligence?
In the 2019 Global Alternative Fund Survey, Ernst & Young puts it perfectly:
"The ability to tailor marketing and investor outreach for specific segments is one of the key drivers of successfully attracting and maintaining a diverse client base."
Also, institutional allocators are increasingly turning to technology for due diligence. Almost two-thirds are willing to invest with managers they haven't met in person, according to a survey by Eaton Partners.
With segmentation and comparable data in demand, coupled with more allocators willing to meet and invest in a virtual setting, how does cap intro evolve in this new digital landscape?
Enter a new wave of cap intro where data is standard across funds, time is your most precious asset, matches are auto-generated, and meetings can be held virtually from anywhere through in-app video or voice calling. It's called Context365, and it's self-driving cap intro.
As an algorithmic matchmaking virtual platform, Context365 pairs allocators with managers across the asset management industry. Members discover each other with matchmaking scores according to mandates and strategies. The platform saves time and energy by suggesting the right capital connections, instead of going down many different roads with other third parties. With standardized data and filtering, allocators can compare data and intelligence across strategies, asset classes, and more.
People meet directly and host due diligence calls inside one secure platform. Fact sheets, presentation materials, and fund profiles are shared instantly. Allocators can compare and contrast funds across several different benchmarks, and the platform enables video meetings, regional, and global roadshows. All activity and conversations are tracked inside profiles so members can come back to discussions and pick up where they left off.
So far, the platform has hosted 2,330 video meetings between managers and allocators. As a firm, Context has held more than 12,000 total meetings since January 2020 with allocators from 35 countries. And, over 87% of those surveyed have invested in managers they met through Context. In total, more than $45 billion of capital allocations have happened through Context meetings.
As the first fintech solution for capital introduction, the Context365 platform provides members with unbiased, structured data, and the ability to rank, find, visualize, and connect in meaningful ways, anytime, anywhere. Experience the benefits of self-driving cap intro by listing your fund or mandate today.
Welcome to the new world of cap intro.
Context365 is dedicated to connecting fund managers with quality allocators in the most efficient way possible. We believe that outstanding connections happen with a mix of high-quality data and algorithmic matchmaking. Our technology and team's combined expertise can help accelerate your productivity in investment searches or fund growth by giving you direct access to our alternative investment network, research, analytics, and reporting platform.
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Insights Oct 5, 2020 Allocators Fund Managers Service Providers
The Old Way of Raising Capital Asset managers have often...