Lost in Translation: One Way to Turn Off Allocators

Going Nowhere with Allocators

Years ago, a family office contact was interested in a fund manager with solid performance ✔️ and a unique strategy ✔️. Plus, the team was personable, smart and charismatic ✔️.

Their strategy used a proprietary system with multiple layers of signal generation.

The team had a way of explaining the strategy in a way that made perfect sense to them, but hardly anyone else.

Unfortunately, this happens A LOT. 👎

The family office kept following the fund manager and held multiple meetings in hopes of understanding the manager’s investment process.

But they didn’t say as much — no one likes to say, “I still don’t get it.”

So the manager (mis)interpreted their continued interest as a sign they were close to an allocation.

But they were not close at all.

They did not get an allocation from that family office. In fact, they routinely failed to raise assets and ultimately had to close the fund.

One allocator admitted, “I can tell they are doing something truly unique and they are super smart, but I don’t get it, and if I can’t explain it to my investment committee, I can’t move forward.”

The manager’s pitch was full of compelling, supportive data, but the talking points were dry, esoteric, and riddled with complex terms.

Yet, they were convinced ‘sophisticated’ investors would readily understand, even appreciate, their methodical, ‘intelligent’ breakdown of the strategy.

In reality, they failed in 3 ways:

❌ They left smart investors feeling unsmart.

❌ They did not win allocations.

❌ They wasted everyone’s time.

Needless to say, NO ONE has the patience for multiple chances today.

You get one shot 🎯.

If investors can’t understand your investment process, they will pass. Period.

It doesn’t matter how smart you are, how great your performance or how interesting your strategy is.

Articulating your strategy in the clearest terms that ‘regular people’ can understand is probably one of the most underrated yet critical aspects of winning allocations. 🏆

Your ability to explain things simply ISa reflection of how smart you are.

It’s also the key to developing new client relationships. 🔑

Can you gauge when your explanation goes over someone’s head?

How do you break down a complex process?

Is your marketing effort somewhat assembled, but needs help? Or maybe you’re at ground zero? Let’s talk!

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