Asset Management Hobbies are Expensive

The same can be true for an asset manager. Acquiring hobbies are often associated with feel-good “wins”:

• That client that was retained when you flexed to accommodate their change in constraints

• That new mandate in what feels like an adjacency to your sweet spot

• That up & coming portfolio manager you retained by letting them stretch into a new style.

Before you know it your investment and communications resources are spending more time managing exceptions than managing the process and your business suffers.

Sometimes these hobbies form the basis of real product innovation, leading to significant business opportunities, so saying no or shutting them down can be a daunting task.

Keep your business on track by being intentional when taking on - or managing - hobbies:

• Be realistic about the investment, operational and service resources required to support adaptive client mandates. Is it a business you can afford to support?

• Moving into adjacencies can feel like a no-brainer; take the time to evaluate market demand and the competitive landscape. How will you grow this business?

• Investor-driven innovation often capitalize on what may be very good ideas in a capital market context but it can be myopic. Is this a real business opportunity or are you avoiding a difficult conversation?

Intentionality will allow you to accommodate hobbies in your business that serve a purpose and more importantly, help you make effective decisions to steer clear of those that might sink it.

Let us help you be intentional as you build your business.

The old adage, “The two happiest days as a boat owner are the day you buy it and the day you sell it” has a direct application to the investment management business. The care and feeding of a boating hobby tends to involve a lot of financial, physical and emotional resources which is why so many boat owners express at least a twinge of regret.