Superior performance may not help an investment manager attract new assets if it does not reach the right market. Many managers mistakenly distribute their product information to the wrong investment markets and, consequently, never achieve the desired results. Despite the time and care managers devote to the development of their marketing plans, they often omit a critical step - strategic database selection.
Databases come in three basic varieties: third party databases, proprietary consultant databases, and a combination of these. A good understanding of the differences between the three types should serve as a starting point for any manager seeking institutional exposure. Over the years,  many third party databases have emerged which distribute manager data to Data Flow consultants who do not collect data directly. Among the best known are eVestment Alliance, Informa Investment Solutions (PSN), Morningstar, and Nelson Information. The larger consultants, such as Callan Associates, Cambridge Associates, and Mercer Investment Consulting, utilize proprietary databases for internal distribution only as a means to screen managers for their clients. Finally, some consultants such as Rogerscasey, Wilshire Associates, and Zephyr Associates collect their own data through a proprietary database but also distribute this information to other sources.
As part of marketing plans, managers need to develop a database strategy in order to optimize their exposure and reach their optimal target markets. For example, a manager with limited resources may consider marketing to the third party databases first. This effort will enable a manager to have a presence in the institutional space without having to dedicate a lot of time to relationship building. Registration with these databases will extend a manager's reach to consultants who may be focused on their particular product type. As in the case of the Informa (PSN) database, more than 80 consultants use the PSN platform to search for managers.
A manager new to the institutional space can take advantage of this expanded distribution to reach their target market. Unlike third party databases, consultant databases require face time, as well as complete, accurate, and current data in order to be considered for a search. Regardless of the type of database, managers must be registered and provide current firm and product information before they are able to meet with consultants catering to their target markets.
Many databases are customized to specific market segments. For instance, some databases are devoted to emerging managers, some have universes dedicated to target date funds, and some have a large global subscriber base. There are more than 20 databases dedicated to the alternative space and over 40 databases dedicated to traditional investment products. Combined, these databases reach more than 300 investment consultants and thousands of qualified investors.
It is imperative that managers to understand the market segments of each database and the relevance of their product to these markets. For example, some consultants serve foundation and endowment clients. If a manager's product would not appeal to this particular client type, distributing information to these consultants is a waste of time and resources. To increase database marketing effectiveness, managers must determine their target markets and identify the consultants and databases that cater to these types of investors. Information regarding various consultants can be obtained using industry directories, third-party marketers, or by partnering with database experts.
When embarking on an investment database marketing campaign, strategic database selection is essential to yield superior results over time.
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