Recently I watched an investment manager presenting his strategy to a group of family office investors. The manager deals in real estate, and so he went through a series of possibilities that the fund was looking at for the next six to eight months.
While he was thorough in his description of the investments, he was not so thorough, in my opinion, on his investment strategy. After his presentation, he asked if the audience had any questions. Four people raised their hands. The first three questions were about fees; the fourth about custody of the assets. There were no additional questions.
As I was a guest of the firm making the presentation, I thought it not a good idea to ask for details about how the money was managed, but I found it fascinating that no one had wondered about pipeline, process, deal structures, failed deals or successful deals. These folks were concerned solely about fees and custody. And while I too am concerned about those things, I also really like to learn how the money is managed.
I am interested in the research process, the creation of the investment thesis and how it’s carried out, on-going monitoring, and the experience that comes with running portfolios. I like to know about a manager’s successes and failures and the lessons learned from both. And, sure, I want to know about the fees and where the money is being held. It’s important to know these things, but it is also important to understand what’s being done with your money. Don’t forget that it IS your money and you need to understand what your manager is doing with it.
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THINGS THAT DRIVE ME CRAZY
I really don’t have anything to report. Right now things are pretty good, although, I will say that it does bug the heck out of me when I order an iced tea without lemon and it comes with lemon. I don’t understand how the server can mess this up, but it seems to happen to me quite a bit. It is about listening, I think, and, well, I guess people just don’t hear me. Either that or they just don’t care. Stay tuned, I am sure something will bother me next week.