Advice For A New Allocator
Ask A CIO #17
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Now back to the reason you’re here – this week’s question comes from a reader who is starting out in investment management and is learning how to diligence new managers.
Do you have any advice for leading manager meetings? I’m working on a project to map out the managers in a certain market. As part of this project, I’ve been asked to lead meetings on my own. What do you consider the most important things to cover in a first manager meeting? What do you do if the manager has a prepared script that’s filling the whole meeting?
I have been in your shoes, and you have come to the right place! I think my answers here can broadly be categorized as substance and style.
Let’s start with substance. How do you figure out what you should try to cover in a first manager meeting? I’ll list here some general tips to get you started:
Be prepared. Always request the presentation or introductory material ahead of the meeting and take the time to go through it all.
A first meeting should usually cover the same basics: firm history, team background, market thesis, strategy differentiation. The specifics will differ depending on the market or asset class, but these are generally the topics to cover.
Building on 1 and 2 above, make a list of questions you want to ask. You could ask about any terminology that isn’t familiar, market assumptions that need to be clarified, why the manager does something a certain way, etc. You’re brainstorming, so feel free to throw in the kitchen sink.
Order your questions by topic (firm, team, market, strategy) and decide what you most want to know for each topic. Aim to cover your top 2 to 3 questions for each topic. If you get through more, great. If not, it’s ok.
Right now, your primary goal should simply be to learn as much as possible. Every meeting is an opportunity to learn more, and each meeting should help you do at least two things. First, you should understand the market just a little bit better. Second, you’ll want to come away with a better understanding of the key skills or qualities that contribute to a manager’s success in that market. This is the starting process for building that market landscape.
Now, I know you might be self-conscious about being newer to investment management, but try to view it as a benefit during this part of your learning curve. The reality is the manager that you’re meeting is likely fully aware of your lack of experience, and that’s ok. We all started somewhere. Use it to your advantage, ask the obvious questions, and help yourself learn faster.
Bonus tip – try not to get bogged down in a discussion about performance in a first meeting. It will almost certainly come up, and rightfully so. But try to keep it quick, and if possible, related to one of the other core topics. A standalone conversation about a manager’s performance is usually less helpful, and besides, you can’t buy past performance.
Next, let’s talk style. Practically speaking, a big part of leading a meeting is managing the pace and tone of the discussion.
You’re right to point out that most managers have a prepared script. And they absolutely should! It’s their job to know their own marketing material inside and out. But while they may have talking points for every slide in their deck, managers are (usually) more than happy to go off script. I’m sure there are exceptions, but I’ve found that most managers don’t actually want to recite the same spiel for the 100th time. And they almost certainly don’t want to flip through the deck page by page any more than you do.
So take it from me, managers are generally more than happy to follow your lead on setting the pace and tone of meetings. But figuring out the particular style that works for you will take time and, realistically, a lot of reps.
Let me share a personal anecdote, which hopefully will make you feel less alone on this learning curve. One of my first solo meetings was with an existing manager that I knew we were likely to terminate. The manager obviously did not know that. I was excited to have the meeting as a learning opportunity – precisely the kind of thing you’re doing right now.
Somehow, our conversation drifted into other strategies the firm managed. And before I knew it, the manager was pitching me on other strategies at the firm. I knew I wanted to turn the conversation back to our existing portfolio, but I didn’t know how. I certainly didn’t want to be rude. And next thing I know, I heard myself asking ridiculous questions about strategies that we were never going to consider. Ultimately, this meeting ended up being a great learning opportunity, just maybe not in the way originally intended.
Transitioning meeting topics and redirecting a conversation that has gone off course can be surprisingly hard! Again, you’ll get better with time and repetition. I’ll offer one piece of advice here to get you started. Try practicing a few different ways to say something along the lines of: “That’s really interesting, but we’ve gotten off topic. I’d love to bring it back to [insert topic here] and ask you about [insert your question here].” Like most people in most situations, managers will appreciate your honesty and transparency.
Fair warning, you might have some (or maybe even a lot) of awkward meetings as you figure it out. I can assure you it’s totally normal, and we’ve all been there.
Keep up the great work.
Thanks for joining, and as always, if you have a question: askacio@ivyinvest.co!
Until next week,
Wendy