In one sense, marketing cannot affect the fee structure within a fund but fees and other financial considerations are so important a consideration to the potential fund buyer that it is worth examining the marketing impact of certain fee structures before the final shape of a fund is settled.

For example, in Europe as in the USA, the trend in funds is to increase the levels of performance fees (to 20 per cent or even 25 per cent) and concomitantly reduce levels of management fees (to 4 per cent per annum or lower). Fund groups with expectations of a high volume of sales should go lower than this.

Furthermore, European institutions and more and more European retail investors are becoming increasingly suspicious of front-end sales commissions designed primarily to encourage agents. Read more »

Posted: February 11th, 2008 under Future Fund.
Comments: 4

Conventionally, funds are promoted in Europe through a prospectus, some form of explanatory memorandum or summary and, often, a sheaf of figures to substantiate the various financial claims. (Reprinted press cuttings may also be included in the pack.)

Prospectus

US and European prospectuses tend to differ not only in content (forced on the writers by different regulatory jurisdictions) but also in lay-out and style. Whereas in the USA, prospectuses are normally economically printed in one colour only, European prospectuses which are often significantly shorter may also double as sales support documents and may thus be produced more artistically to include performance graphs and other coloured charts. European prospectuses also often have separate (card) front covers. Read more »

Posted: February 11th, 2008 under Future Fund.
Comments: 4

In Europe, as elsewhere in the world, institutions like when possible either to deal with specialist boutique operations or with operations the same size (or at least with the same standing in their particular industry) as themselves. Thus a middle-sized fund group with, say US$ 10m or US$ 25m under management is going to find itself with a very hard sell indeed. In these circumstances it is important, from a marketing standpoint, to quote all the capital/corporate size available. Thus if the middle-sized fund group is a subsidiary of a larger brokerage or banking operation, the capital worth of the parent should be brought into play. Read more »

Posted: February 11th, 2008 under Future Fund.
Comments: 5

The development of such a relationship is dependent on taking time out to meet journalists. Normally such meetings may be arranged during the course of a trip to a particular area. Expecting a relationship to develop on the back of press releases and the occasional telephone call will not work.

Once familiarity with at least some members of the press has been established, the fund group should expect to achieve comparatively regular coverage, particularly if the announcements it makes are tailored (or appear tailored) to the country in question. The fund group should also, with a little pushing, gain the opportunity to submit placement pieces talking more generally about the managed derivatives industry and should also be included in investment survey and so on. Read more »

Posted: February 11th, 2008 under Managed Futures.
Comments: 4

European Institutions

The preparedness of European institutions to purchase either managed derivatives funds or programmes varies across the continent and is dependent upon a series of factors some of which may be addressed by marketing.

1. The regulatory (and tax) environment;
2. general familiarity with the derivatives and managed derivatives industry;
3. familiarity with the fund management group attempting to sell product;
4. presence and format of a track record (at least for past funds if a new product is offered);
5. money under management within the fund group;
6. technical expertise within the fund group;
7. performance aspirations for the fund or investment programme;
8. quality and content of the explanatory/sales materials;
9. financial considerations such as fees implicit within the fund or programme.

Read more »

Posted: February 11th, 2008 under Managed Futures.
Comments: 4

Within the context of the managed futures industry in Europe, there are, looselydivided, six marketing objectives depending on the product being offered and the type of company or group which is offering it. These are:

sales of funds or management programmes to investment institutions;

• CTAs attempting to manage money within (usually) multi-manager funds or equivalent investment products;
• sales by fund management groups, to expatriate retail investors or, increasingly (with domestically registered funds) to retail investors within their own countries;
• fund management groups seeking joint venture partners for the creation and distribution of funds (usually retail) within an individual country or economic block;
• fund management groups seeking sales agents to distribute products on a commission basis in a defined area;
• consultancy groups attempting to act for investment management groups — particularly those considering multi-manager derivatives funds, to structure the fund, select CTAs and control asset allocation.

Read more »

Posted: February 11th, 2008 under Managed Futures.
Comments: 3