Friday, February 24, 2012

MIPIM/Donating carries and fees/"Failure to Communicate" Epidemic

Last minute plans:  Today I decided to attend the MIPIM conference in Cannes, France from March 6-9.  It's an event that I've been closely connected to for many years and there will be too many of my industry friends there, from all over the world, to not be there myself.  If you're going to be at MIPIM please let me know as it would be fun to pull a bunch of people who are part of this OTR community together for a drink.

Craze Materializing?  I read with great interest this morning that a large U.S. public pension fund has allocated $15MM to an emerging real estate manager.  Of course, that in itself is not news as there are emerging manager programs/mandates within many pension funds investment strategies.  But what caught my attention was this comment in the article, "One aspect of the fund that appealed to the pension plan was that 10 percent of the firm’s carried interest and management fee income is donated to charity and other non-profit community organizations. “One of the cornerstones of the manager is they participate in the communities that they invest in,” said the pension fund's CIO.  That's a nice reason, isn't it?  And it's the first time I've heard of a manager making this part of their M.O. (Modus Operandi) It shows me how creative people are getting in figuring out different ways to get across the goal line when raising institutional money.  And, if our institutional investors can influence changes in the way things are done that also have a 'do good' feature attached to them, well, that seems like a win-win to me.  And, just like the idea of not charging asset management fees on committed, but only on invested capital, which has become more popular over the past couple of years, others will follow. 

But there are other 'new' ideas that I've been hearing about.  Not do to with the investment management business although one is a tool for the LPs of the world  Unfortunately, at this point, I can't share them with you because, in one case, it hasn't actually been launched yet and in the other case it's still being built 'in the garage.'  This one could be a real game-changer and both are very cool. Stay tuned!

Feedback:  It seems that people failing to circle back, to close the loop, to get back to you, is epidemic based on the number of emails I got from you last week.  "It seems to be more the norm than the exception," one of you wrote me.  From another long-time OTR reader, "I so agree with you regarding "close the loop!" I call it the "black hole."  I truly don't understand why some people do not just come out and say they have decided not to continue the conversation, the deal, finalize the agreement, etc." This is a sad state of affairs.  I believe communication, especially today, is pretty simple and why should it be so difficult to remember the the kindergarden adage, "Treat people as you would like them to treat you?"  Even if it's bad news, perhaps especially if it's bad news, communicate it, close the loop.  It's the decent, respectful and professional thing to do.  Any dissenters on this? (P.S.  I'm sure many of you recognize the phrase, "Failure to communicate" from the classic Paul Newman movie, Cool Hand Luke.

Solutions by Steve Felix Update: Two examples of consulting assignments I've completed

1.  Solutions provided to fund manager marketing to U.S. institutional investors for the first time.  

Marketing guidance:  Furnished ideas on what resources they'll need to be successful.  
Presentation coaching:  Assessed and evaluated their marketing materials and supplied ideas on what changes would make them more effective.
Brand awareness:  Suggested ways they can build awareness of who they are to an audience that really doesn't know them....yet.

2.  Solutions provided to an established fund manager who needs to broaden their outreach to the institutional investor community.

Marketing guidance:  Facilitated dialogue with two senior executives which resulted in agreement on some new and innovative ways they'll need to market themselves.
Educating the market:  Employed "Reverse Solution Engineering" to reach agreement that educating investors on the proven merits of their strategy needs to be the first step in successfully raising capital from new investors.

Btw, both clients have engaged me to provide additional solutions for them.

To schedule a free "needs assessment" conversation about how I can help you fill a need or solve a problem, please reply to this email.  I look forward to talking with you.  



On the road...

Feb. 28-Mar.1:  Scottsdale to attend the NCREIF (National Council of Real Estate Investment Fiduciaries) Winter Conference
Mar. 6-9:  Cannes, France to attend the MIPIM conference.
Mar. 13-15:  Boston to attend the PREA (Pension Real Estate Association) Spring Conference
Mar. 18-20:  Miami (South Beach) to attend the NAREIM (National Association of Real Estate Investment Managers) Executive Officers Spring Meeting
March 29-30:  Philadelphia, PA to be a judge in the Villanova University Real Estate Case Challenge
April 24-25:  Los Angeles for the PERE Global Investors Forum 2012
May 17-20:  North Palm Beach, FL to attend the annual meeting of The Homer Hoyt Fellows

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