Panegyric marketing

Integrated Marketing strategy and communication platforms

April 2010

Is Your Ear More Tin Than In(stitutional)?

Battered by the global markets, disappointed by poor performance and managers both domestic and
international, institutional investors are mad and they aren’t going to take it anymore. While they
can’t do much about the ongoing crises in global economies and worrisome geopolitics, they are
exerting control over who they choose to invest with and what information they demand from their
investment partners. If you are a fund manager in alternatives and looking to gain assets from these
investors, the time has never been more important to fine tune your sales approach and improve your
capital-raising efforts.

This is not about whether your investment strategy is in favor or not, whether you are an experienced
or emerging manager, or even whether you are well-established or just building your platform.
Regardless of where you fall within these parameters, the institutional audience wants to hear from
you in a way that is clear, concise and shows conviction in your beliefs. No obfuscation, no “black box”
of mystery surrounding your performance results, and no piles of data about how you execute your
strategy. This is definitely not the time for burying them under minutiae. More detail, yes. But much
more targeted and organized according to their needs.

In short, today’s investor is savvy, battle-tested and unwilling to wade through your information chaos.
They look to partner with alternative investment professionals who not only have the talent and
performance they expect, but who also speak their language, are sensitive to their communication and
reporting requirements and don’t fight them over requests for information. Keep in mind that these
investors are also being required, by their boards, committees, trustees and fiduciaries to provide an
ever-increasing specificity of detail regarding their portfolios, particularly in the area of alternative assets.
In this information exchange, you are either an asset or a liability from the institutional perspective.

So how do you become a bigger asset and, in turn, raise more of the same from these investors?
Today, institutional investors need to satisfy a growing list of concerns around their alternative asset
allocations. It is encouraging to note that, according to a recent survey conducted jointly by SEI and
Greenwich Associates and released in January of this year, 80% of the respondents already invested in
hedge funds had no plans to change their allocations, while 15% actually plan to increase their

Diane Harrison PH: 908.208.7296

Principal FX: 347-214-6319
41 Deer Creek Drive, Basking Ridge NJ 07920 E: dharrison@panegyricmarketing.com
allocation in 2010. What this means for managers is that an opportunity to gain greater market share
with the institutional investor base goes hand in hand with a stronger mandate to communicate
better with them.

Institutional investors filter their selection of managers in many ways, not the least of which includes
the increasingly important category of transparency. Some of the most commonly requested details
about a manager being evaluated include:

• Description of the management team

• Market strategy/ approach
• Organizational structure
• Execution/ trading operations
• Risk management controls
• Performance and managed growth of assets
• Due diligence process
• Investor relations/ reporting services.

The same survey went on to stress that, for institutional investors, transparency is both the largest
concern and the greatest challenge related to hedge fund investing. A full 70% of respondents
currently invested in hedge funds reported requesting more detailed information from managers than
a year prior. Too often, managers make the mistake of disgorging mountains of data at investors in an
effort to appear “transparent.” Institutional investors have spoken and their message is clear: give us
actionable and digestible information about your business or we will take our business elsewhere. It is
critical for success that managers learn to craft a coherent and focused message. Those that answer
the challenge have a real opportunity to raise institutional assets with investors seeking opportunities in
alternative assets.

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Panegyric Marketing is a specialized marketing communications firm providing a wide range of

strategy and writing services within the alternative assets sector. We provide over 20 years’
of expertise in marketing, investor relations and communications, including establishing or
refreshing hedge funds’ marketing identity, creating sales collateral, and all forms of client
communications. With a flexible approach and a wealth of experience, we collaborate with
our financial partners to create superior and meaningful deliverables.

Diane Harrison PH: 908.208.7296

Principal FX: 347-214-6319
41 Deer Creek Drive, Basking Ridge NJ 07920 E: dharrison@panegyricmarketing.com