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.

It is worth noting, in that context, that the separation between editorial and advertising which is a characteristic of most national newspapers does not always hold so strongly in trade magazines and therefore the occasional expenditure of corporate advertising funds can go a long way to create friends.

The principal aim of a press relations campaign is to provide independent (or apparently independent) endorsement of the importance of particular managed derivatives so that one-on-one meetings with institutions will occur that much more easily.

Track Record

Press relations cannot, however, help with one of the more vital elements of a salesman’s ammunition—track record. In the past it has been true that no European institution would consider a fund group without a relatively substantial real track record. However due to increasing concerns about performance of an investment programme tending to decline over time as the space grows between the period when the trading/investment system was developed and the present, this is no longer the case.

Track records, even if largely hypothetical should, however, include an element of real trading. They should also contain as much independent verification as available (for instance, audited accounts) and, wherever possible, be quoted net of fees and expenses. Furthermore, hypothetical track records should also recognise and account for imperfect market conditions—price slippage and the like.

It is generally not necessary, unless aiming for a fund focused on one country, to requote performance in a non-dollar currency (assuming the original performance is quoted in dollars) nor is it essential to quote comparisons against local indexes (but see Performance below). That said, in the UK a very large number of institutions measure performance against the Financial Times Actuaries Index (FTA).

Finally, track records should not be squeezed to produce the highest possible performance. A number of fund groups have reported that European institutions are very concerned about the balance between performance and risk and tend to be suspicious of unusually high figures fearing these cannot be repeated consistently.

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Gaining Profile—Press Relations

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• Marketing Issues : Some Generalisations
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• Performance Measurement