Prospecting Endowment / Pension Funds

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drk_999's picture
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Joined: 2010-12-28

I am currently working on setting up a RIA. I plan to do Fee based discretionary accounts using value investing philosophy. I am just wondering whether any one can give advice how to prospect Endowment/Pension Funds? The reason I want to approach them is they have longer time horizons. This is very important for my investing philosophy. I already tried to search and could not get any articles. Thanks in advance

njh_at_lfg's picture
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Joined: 2011-02-17

I would suggest putting together a brochure that highlights your investment philosophy, past performance, and tenure in the business.  Many of these funds work with "the big guys" and without sizable AUM or solid track record they might discredit you as and advisor.  This is a niche that takes time to break into but it doesn't mean it cannot be done.  Best of luck.

Stockguy2011's picture
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Joined: 2011-03-28

I second that and add - You need to know/get to know the right people.  Like it or not, in most places it is a very political game.  That can be good or bad.  You do have another source of income while you try to land these big dogs right?I would argue that most consultants will not consider an RIA until they have a 5 year TR and at least $50-100mm under management.It can be done, but takes more time to develop than anything.

drk_999's picture
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Joined: 2010-12-28

Yeah, I will be working on it for next three years to build the track record. One of my mentors suggested me also get my CFA charter, which also help. I am also working on my level 3.  Initially I should be better off  focusing on ith HNW, small business and IRA accounts. Once of the fund managers is interested in getting Equity in my RIA for initial capital. What would be a good trade off?

njh_at_lfg's picture
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Joined: 2011-02-17

I would slip 80% of your focus on the individuals and business accts, while spending the remaining time chasing the big dogs.Personally I believe designations are like a-holes, everyone has one and they all somewhat stink.  You will land few clients soley on the fact that you have designations.  Better to focus your time on landing new clients than studying for exams and designations.  Again thats just my personal opinion.

Stockguy2011's picture
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Joined: 2011-03-28

njh_at_lfg wrote:I would slip 80% of your focus on the individuals and business accts, while spending the remaining time chasing the big dogs.Personally I believe designations are like a-holes, everyone has one and they all somewhat stink.  You will land few clients soley on the fact that you have designations.  Better to focus your time on landing new clients than studying for exams and designations.  Again thats just my personal opinion. You are correct about most designations.  The CFA is quite different.  If you want be in the instituional business it is almost imperative.  By far the most difficult designation to acquire - plan on 3 years, with 6 months out of each year locked in your office w/ no distractions - your friends will not think highly of you.

B24's picture
B24
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Joined: 2008-07-08

As far as pensions and endowments, you could do OK prospecting for smaller ones to get your feet wet.  Most true institutional advisors are not going to take on the $500K - 2.5mm accounts (most don't even want accounts under $5mm or higher even).  There are lost of accounts in that range you could go after.  Once you can point to how many institutional clients you have, how you run their money, etc, you can be confident enough to go after larger plans.

drk_999's picture
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Joined: 2010-12-28

Thanks everyone for the input. Appreciate it

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