Poacher Turned Gamekeeper

A short story.

No holds barred on this one. I hope it resonates with a few of you. ?

In November 2004, aged 34, I left the C suite of a blue blood private bank and asset manager. Actually, it’s the last time I had a job. I’d been there around 10 years, built a decent franchise & so it was a very tricky exit with plenty of legal letters because I was setting up in direct competition. These were the days of non-competes having some teeth! Ironically, the client’s I thought would come across didn’t but many others did. In the big scheme of things it probably did my old shop a favour, don’t imagine they missed some of those 2 cent accounts & portfolios! And much more importantly than migrating old clients, I set about building a marketing engine to win new clients.

By the way, I'm Simon, good to see you here, I find, fund & support emerging fund managers seeking to enter the UAE & those already here. Please do make sure you're subscribed to this weekly letter & I'd love you to follow & connect with me too.

So, back to the story

My founder journey started in a very scrappy way ? ??

We had no brand?

The internet meant we could put a brochure online - that was about it ??

Socials weren’t a thing ?

We hired when we should have fired

We took on the wrong clients, often ?

One month fairly early on, we couldn't touch our reg cap and we had just 14k in the operational bank account with 70k of payroll to meet ?

We hit it out of the park during GFC and then bombed the numbers when markets roared?

We didn’t manage keyman risk very well ?

We were taken to employment tribunals?

Some of the starting team should have been fired after 18months, somehow they were all still there after 5 years?

I travelled every week of the year winning & trying to keep clients often to the detriment of the team back at base ?

We worked with many 100’s of emerging managers building them into our client portfolios, some amazing, some terrible ? ?

We had client complaints, some valid, some cynical that triggered our professional insurance cover?

We took big risks e.g. the time we signed a 5 year office lease a few weeks after Lehman went under (Hmmm)

We turned down M&A when we probably should have done the deal

We moved from discretionary managed segregated accounts to a co-mingled fund structure

We launched more funds, some successful, some not

But, overall, we hustled, scrapped & managed to build a half decent, compliant shop despite a litany of almost daily errors.

I targeted the RIA/IFA market for distribution which meant building deep links with the trade press, financial TV and radio. Every week for a decade I co-hosted morning squawkbox on CNBC Europe, appeared on Bloomberg TV and radio, did video training, panels & speaker slots for large insurance companies & fund shops plus wrote endless monthly pieces for rags. The early version of personal brand I guess. It worked, we built a differentiated distribution engine without paying for an army of salespeople.

And whilst we likely made more mistakes than most, this is actually what starting, building & managing an asset management firm from scratch involves & feels like. It never feels comfortable, it always feels like payroll is fundamentally at risk, there’s barely a moment when it got anything close to the comfort blanket I had enjoyed working for names with a pay check. Some years our clients and our own team made a ton of money and some years our clients saw declines & we had to put money back in. I realise now that working for a large firm with a brand is by far the easiest thing I ever did. I learned barely anything useful for becoming a founder (even though I thought I did) This is why, somewhat controversially, I'm always nervous of lift-outs and spin-outs directly from the wire house firms. Yes, these folks are always delightful, talented human beings but very few have the risk appetites and instincts to build a business from the kitchen table. ? ??

Track forward 21 years. Our industry often suggests that institutional operational and organisational platforms, deep dive practise ODD fire drills, pristine resumes, an audited back test, traction at conferences, fund structuring, AML, standard operating processes will get you AUM. ??

It’s true, you need many of these things locked down, looking shiny. In truth, I also agree that the importance of your operational and organisational engine has gone up 10 dial turns in the last 20 years. ?

But it’s also fine, absolutely fine that your early journey may not look or feel very institutional. It will not be pretty, you’ll probably get sued by someone, you might have to delay a few payments, it will be tough getting professional insurance, your best client will pull their money just when you’ve added an expensive team to payroll & you wont be able to hire anything close to the talent you really need in the early days. ? ? ? ?

To conclude, if I have a unique insight into the fabulous emerging managers that jump on our accelerator programme, it's that I have been precisely in their shoes. I know what that particular brand of high, high and low, low really is. I know what it is to set up shop in one of the most competitive markets on earth against giga brands that spend your total annual revenue on bananas for the office kitchen. And so, I can smell a manager who’s likely to succeed at a 1000 paces and sadly, identify those who will never raise.

The struggle is an essential part of the journey but my own lived experience informed why we created our accelerator programme - to improve the odds of success for those fund founders who are willing to scrap, listen & marry founder grit with operational excellence. ?

If?you’d like someone in your corner helping you fund and build your firm who’s been exactly where you are now, do reach out and say hello.?

Thanks for reading, see you, same place, same time next week. ? ??