Tag Archive for: institutional

Bullets can streamline your writing

Investment RFP writers–the folks who fill out those tiresome questionnaires called requests for proposals–sometimes get sloppy.

Photo by Paul Watson

Tight deadlines allow little time for copyediting. This before-and-after example shows how adding bullet points can streamline an RFP answer. The “after” example is also easier to skim.

BEFORE editing

Each month, you can expect a summary report via email that includes your portfolio’s performance results, attribution analysis, and portfolio characteristics. We send the summary reports no later than six business days following month end.

AFTER editing

Within six business days of month end, you will receive by email a summary of your portfolio’s

  • Performance
  • Attribution analysis
  • Key characteristics

How you can crack this editing challenge

Could you achieve the “after” version on your own?

It’s a result that mind mapping, which I discuss in “How to Write Blog Posts People Will Read,” could help you to achieve.

Best practices for institutional asset manager websites–Can you add anything?

Best practices for institutional asset manager websites don’t get as much attention as retail sites in the blogosphere. So I’m asking all you seasoned institutional marketing experts to help compile a list of best practices.

In this post, designer Margaret Patterson offers tips on firm-specific information, educational content, and search optimization for institutional investment management websites. Read on for the details of Patterson’s suggestions.

Firm-specific content

In addition to the basics, include the following, suggests Patterson:

  1. A complete “Executive Experience” organization chart, clearly featuring all analysts and their areas of expertise
  2. A client list, but only after getting permission from each of them
  3. Use each search optimization word or phrase at least twice somewhere in your website.

Educational content

Small institutional investors appreciate education, says Patterson. For example, a glossary of terms and analytical definitions, such as free cash flow, operating cash flow, etc.

Here are more of Patterson’s content recommendations:

  1. Downloadable white papers are a big draw. For example, “Actively Managing Bonds vs. Laddering: Pros and Cons.”
  2. Consider offering email market and industry commentaries PDF files.  Google searches favor sites that have been recently altered. Regularly adding new documents improves the odds that Google will lead potential investors to your site.

Special content for special targets

Provide a page or two of content for institutional consultants, suggests Patterson. “For example, a liability-driven approach or exceptional reporting capabilities, when applicable, are music to their ears. I push service, service, service when consultants are among those being pitched.”

If you have questions for Patterson, you can email her at mpco@verizon.net.

Please help add to this list.

Use the “comment” section below or email your suggestions for best practices to

Technical analysis of stocks can boost the power of your fundamental research

You can use technical analysis in combination with your firm’s fundamental equity analysis to help decide when to buy or sell stocks. This is the message I took away from “Applying Technical Analysis to a Fundamental Investment Strategy,” a March 23 presentation to the Boston Security Analysts Society by David Keller, who oversees technical analysis as a managing director of research for Fidelity Investments. 

Technical analysis is not voodoo science, throwing darts at a board, or even a prediction of the future, said Keller. Rather, it’s a way to analyze supply and demand using patterns, he said.

Fundamental research and technical analysis tackle different parts of the decision to trade a stock. Here’s how Keller described them.

  1. Fundamental research analyzes the company for the what and why of buy and sell decisions.
  2. Technical analysis analyzes the stock, looking purely at market activity for when and how to buy or sell

These two approaches overlap, in the opinion of Keller and the Fidelity portfolio managers who use his team’s research. Technical research helps to identify the best time to execute a fundamental strategy, he said. You can think of technical analysis as a trigger, he said.  

When the results of technical analysis diverge from those of fundamental research, portfolio managers should pay attention, according to Keller. He referred to point and figure charts as “a gut check on how I look at individual stocks.”

Relative strength indicators are among the most important technical indicators, Keller said. They can be warning signs, he added.

Keller’s message was warmly received by members of the audience, most of whom raised their hands when asked if they regularly consulted technical indicators. 

Related post
* Fidelity’s head of technical research addresses “Where will the stock market go from here?”
The next session of “How to Write Blog Posts People Will Read: A Five-Week Teleclass for Financial Advisors” will start in April. For more information, sign up to receive “Information on upcoming classes, workshops, and other events” as well as my free monthly newsletter.
Copyright 2010 by Susan B. Weiner All rights reserved

Institutional equity research job hunters, check out this site!

If you’re an analyst looking for a job in institutional equity research, you should read the ResearchWatch blog published by Integrity Research.

The blog will help you stay current on trends and players–especially independent research firms–in institutional equity research. Some recent topics included 

You can subscribe to ResearchWatch by email or RSS feed.

Institutional plan sponsors make lousy decisions

Institutional plan sponsors don’t know what the heck they’re doing when they make asset allocation decisions.

At least that’s the conclusion I’m tempted to draw after reading “Absence of Value: An Analysis of Investment Allocation Decisions by Institutional Plan Sponsors,”(subscription or membership may be required to access article) Financial Analysts Journal (Nov./Dec. 2009) by Scott D. Stewart, John J. Neumann, Christopher Kittel, and Jeffrey Heisler.

Plan sponsors’ poor product selection was responsible for most of the underperformance in the author’s study. As their abstract states, 

Results show that plan sponsors may not be acting in their stakeholders’ best interests when they make rebalancing or reallocation decisions. Investment products that receive contributions subsequently underperform products experiencing withdrawals over one, three, and five years. For investment decisions among equity, fixed-income, and balanced products, most of the underperformance can be attributed to product selection.

These poor decisions may be due to investment officers finding “comfort in extrapolating past performance when, in fact, excess performance is random or cyclical,” suggest the authors.

Should this research impact how plan sponsors manage their assets? I’d like to hear what you think.
Susan B. Weiner, CFA
If you’re struggling to pump out a steady flow of good blog posts, check out my five-week teleclass for financial advisors, “How to Write Blog Posts People Will Read,” and sign up for my free monthly e-newsletter.
Copyright 2010 by Susan B. Weiner All rights reserved

Poll about overweight, but not the stuff of New Year’s resolutions

I grapple with “overweight” at the end of every year and every quarter. 

It’s the kind of overweight measured in percentage points, not pounds. That’s because I’m writing performance reports for institutional mutual funds that may overweight or underweight sectors relative to the funds’ benchmarks.

I haven’t found any guidelines about how to write about these statistics, so I’d like to find out which wording you prefer for talking about a fund that has above-benchmark holdings in a sector.

  1. Our overweight in
  2. Our overweight position in
  3. Our overweight to
  4. Our overweighting in
  5. Our overweighting to

Please answer the poll that will appear in the right-hand column of this blog until some time in February. I’ll report the results in my March newsletter.

If you can give a compelling reason why you favor specific wording, I’d also like to hear about that.

Which wealth managers have the highest profit margins?

People are always curious about who makes how much money. That’s probably why I zeroed in on the profit margin comments made by investment banker Elizabeth Nesvold, managing partner of Silver Lane Advisors, when she spoke about “Trends Amid Turmoil in the Wealth Management Business” to the Boston Security Analysts Society on November 18.

Because multi-family offices (MFOs) deal with wealthier clients than financial planners, I was surprised to learn that their margins are lower than financial planners’ in typical market scenarios, ranging from 10%-30% vs. 20%-35% for financial planners and asset allocators. However, the difference made sense when she explained that MFOs get hurt by “scope creep.” It’s expensive to service a multi-generational family as compared to an entrepreneur who just sold his or her business, Nesvold said.

Here’s the hierarchy of margins under typical market scenarios, in descending order, according to Nesvold.

  1. Hedge funds, 50%-70%
  2. Hedge funds of funds, 25%-60%
  3. Traditional institutional, 30%-70%
  4. Investment counsel, 25%-40%
  5. Financial planning/asset allocation, 20%-35%
  6. MFOs, 10%-30%

Do these margins sound realistic to you? 

Harvard Management’s Mendillo grapples with challenging environment

Even Jane Mendillo admits she had awful timing in becoming president and CEO of Harvard Management Company (HMC) on July 1, 2008. As she said in her presentation on “Endowment Management in a Changing World” to the Boston Security Analysts Society on March 25, she assumed her post
* Two days before commodity prices peaked
* Six weeks before the beginning of a massive rescue of financial institutions
* Just before six to nine months of the most challenging markets that most investment professionals have seen
Nonetheless, Mendillo showed a cheerful face to the friendly audience containing many fellow CFA charterholders.

Mendillo is cautious about investments because “At this point, uncertainty is a big factor in markets and economies. The short-mid term may be challenging,” she said. It could take many years, she acknowledged, for the size of the Harvard endowment to return to its $37 billion level of June 30, 2008. Still, she noted, the endowment has posted excellent gains since its beginnings, including its growth from only $19 billion five years earlier.

Mendillo’s caution is reflected in the endowment’s actions. “We’re not rushing for the exits. Nor are we rushing to get back into the markets,” she said. Mendillo took pains to correct what she called misperceptions that HMC has sold private equity holdings for “pennies on the dollar.” The firm has made some transactions in secondary markets, but hasn’t taken major chunks out of its private equity holdings, she said.

HMC is taking a more conservative tack under Mendillo. It has cut back its -5% cash weighting to -3% for the first time in decades. Moreover, the portfolio is “seriously in cash,” she said, because she wanted to create more flexibility in the portfolio and make room for new investments.

Where is HMC heading? Mendillo gave some clues, saying
* We continue to be cautious about deploying cash.”
* “If we don’t think we have an edge in a market, we stay out or we index.”
* External management is significantly more expensive than internal management, so if external management doesn’t pay off, HMC will hire a team that can deliver
* The failure of the illiquid portion of the portfolio to be self-funding has “impacted our appetite for further illiquid assets”
* She expects to see very attractive opportunities in real estate, but they may lie a couple years ahead.
* She is very excited about what the firm’s natural resources team has uncovered.

Creating Pitch Books Without Losing Your Mind… a Sequel

“Creating Pitch Books Without Losing Your Mind… a Sequel: Your Pitch Book – a Foundation for Customizing” is a guest post by designer Margaret Patterson. Her 2007 series about “Creating Pitch Books Without Losing Your Mind” has attracted lots of attention. Thanks for your latest contribution, Margaret!

If you have questions for Margaret, please leave them as a comment. I’ll make sure she gets them.

My first article about pitch books provided several “must do” tips to help your firm develop presentations that others will plagiarize, the best compliment attainable.  Readers’ questions have prompted additional pointers about the next phase: customizing.

When is it worthwhile for institutional and high net worth asset managers to customize?
Your first pitch book is a base. But it doesn’t always address your prospective client’s unique concerns. Your key contact at the prospect can tell you what points are most crucial. Add information that addresses their concerns. But be succinct or you’ll overwhelm your prospects with too much information.

As you customize, you should communicate value statements – to your audience, about your audience – to the extent reasonably possible.

What do you mean by value statements?

Focus on how your strategy is a good fit for the prospect’s objectives, your ability to provide the level of service the prospect needs, and providing adequate diversification, considering prospect’s current investment profiles.

Will customizing dilute our firm’s branding?
You run the risk of diluting your branding when many employees and consultants contribute to your pitch books. That’s why these projects should be managed and maintained by your marketing department.

Remember that content is both text and graphics. After all, our actions are prompted every day by both words and images. Your book should look and sound impressive. Your writer  can develop Writing Guidelines for your firm, language that consistently supports your branding. You also need Design System Guidelines, if they do not already exist. Share these guidelines with the contributors to your pitch books.

I keep a sign on my office wall, “Big Company Seeking Big Clients.” Keep this mission in mind as you ponder complicated content.

If you customize, how do you keep the versions from getting out of control?
A customized pitch book is a script for your meeting. Limit yourself to information you can comfortably handle in the scheduled meeting time. Allow for Q&A.

Additional valuable information can be provided in companion pieces – market commentaries, performance summaries, firm overview, etc.

Updating charts and tables is a constant problem.

Delegate database updating to employees endowed with considerable diplomacy and perseverance. Make this their primary responsibility. They will acquire information from very busy investment management teams.

Investment managers need deadlines in advance. Allow elbow room.

Input is welcome. Your thoughts may show up in future articles. Let me know if I may quote you.

Margaret Patterson Company creates sales support materials, develops identity systems, and provides production supervision for financial services firms.

Margaret Patterson Company
Corporate Identity & Communications Graphics for Financial Services Firms
mpco AT verizon.net         t   617.971.0328        f   617.971.0327