I N D U S T RY • L U X U RY • O P I N I O N
Editorial EDITOR
Mark Hedley DEPUTY EDITOR
E DI TOR'S
L ET T E R
Jon Hawkins ASSOCIATE EDITOR
Cathy Adams SUB EDITORS
Chris Borg, Guy Weress EDITORIAL ASSISTANT
Mike Gibson
Design ART DIRECTOR
Matthew Hasteley SENIOR DESIGNER
Lucy Phillips DESIGNER
Abigail Robinson JUNIOR DESIGNER
Bianca Stewart
Contributors Elio D’Anna Nick Boulos Simon De Burton Ermanno Mattio James Sherwood Claire Sweetingham Robin Swithinbank Safi Thind PHOTOGRAPHER
David Harrison COVER PHOTOGRAPH
Michael Höerner
Advertising SALES DIRECTORS
Mike Berrett, Alex Watson SALES MANAGER
Will Preston ACCOUNT MANAGERS
Campbell Tibbits, Louis Sidey
Printing Blackmore
T
he last time I said Happy New Year to a fund manager, he replied, “Is it?”. But that was 12 months ago and the investment landscape looked bleak then. Thankfully, 2013 proved to be a far better year than many predicted. One man who can certainly hold is head high is John Paulson [p106]. After his event-driven funds took a beating in 2011-12, he’s certainly proven his worth again. His $2.4bn Paulson Recovery Ltd fund, established in 2008, was up 57.6% when we went to press. Not bad for one year’s growth; it returned 9.9% in November alone. His Advantage fund was up 22.7%, while his Credit Opportunities fund is close behind with 21.3%. No wonder he’s been splashing out of late… Paulson’s acquisition of Steinway & Sons was undoubtedly a shrewd move by the veteran fund manager. Even buying just one Steinway piano pays dividends – a 50-year-old model commands a price more than nine times its original cost [p56]. No doubt he hopes buying the whole company will lead to similar returns. And if a piano company is a little out of your price range, then perhaps an antique Stradivarius is more your kind of score. Making multi-million pound profits on one violin? That’s music to any investor’s ears [p50].
ERMANNO MATTIO Mattio is partner and COO of Peregrine Communications. He has worked in business development and research roles for Credit Suisse First Boston, Commerzbank, Dexion Capital and MSCI Barra before he joined Peregrine in 2011. [p22]
SIMON DE BURTON Simon de Burton is a journalist and author who writes about a wide range of luxury objects, from highend wristwatches to bespoke motorcycles. This issue, he looks into the relatively unknown world of violin investment. [p50]
NICK BOULOS PUBLISHED BY
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COMMERCIAL DIRECTOR
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TINY COMPETITION: Find the miniature violin hiding in the magazine. Email us with its location to competition@squareupmedia.com for a chance to win a mystery prize. T&Cs apply.
RAB Capital – an apology In issue 27 of Hedge, in an interview with Louis Gargour, there were references alleging: (i) that RAB Capital threw parties which certain celebrities attended; (ii) inappropriate personal conduct in the RAB Capital office; and (iii) that there were discussions with the board of RAB to change the name of RAB Capital to include reference to Mr Gargour. We have been advised that these statements were false. As such, we retract the statements and apologise to RAB Capital for making the references.
Nick Boulos has been travelling the world and calling it work since 2007. In that time, he’s visited all seven continents and nearly 100 countries writing for the Times, the Independent, the Guardian and the Washington Post among others. [p70]
© Square Up Media Limited 2013. All rights reserved. No part of this magazine may be reproduced without the written permission of the publisher. All information contained in this magazine is, as far as we are aware, correct at the time of going to press. Square Up Media cannot accept responsibility for errors or inaccuracies in such information. If you submit unsolicited material to us, you automatically grant Square Up Media a licence to publish your submission in whole or in part in all editions of the magazine. All material is sent at your own risk and although every care is taken, neither Square Up Media nor its employees, agents or subcontractors shall be held liable resulting for loss or damage. Square Up Media endeavours to respect the intellectual property of the owners of copyrighted material reproduced herein. If you identify yourself as the copyright holder of material we have wrongly attributed, please contact the office.
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HEDGE
OPINION COMMUNICATION
S H O R T S
Get Your Message to the Masses ERMANNO MATTIO says
investment managers can flourish if they adopt good communication strategies
SHORTS
INVESTMENT MANAGERS ARE reaching an inflection point, increasingly having to realise the benefits of effective communication strategies. In 2008, crises began when investors flooded towards the emergency exits and became increasingly difficult to tempt back. This accelerated a secular trend in which investors have been becoming more experienced and competent, demanding to fully understand – rightly – what they are investing in. So if communication is to become a vital part of investment managers’ activities, what would the crucial elements of an effective campaign be? To start with, communication should not be treated as an option. Most firms agree that marketing is an integral part of an effective corporate strategy – but many fail to realise that communication is an integral component of marketing. The first premise of any successful campaign is belief in its power. This might seem obvious but, all too often, firms engage with an audience without full conviction. Whether as a result of poor strategy or individual staff indifference, communication falls flat. Successful campaigns feel passionate and genuine to their audience, and this is only possible if a firm’s spokespeople truly believe they have something important, and different, to say. Secondly, a firm’s external communication partner, normally an agency, should fully understand the value an investment manager provides to its
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clients, which is why a communication partner specialising in investment management is crucial. The more specialised the communication partner, the more intimately they will understand a firm’s products, competitive landscape and investor mindset. They will also understand the challenges, as well as the opportunities to add value to clients. Whereas non-specialist agencies see an undifferentiated, broad brush view of the investment landscape, a specialist can sharpen the differentiating subtleties that make a specific investment manager a compelling investment proposition. Thirdly, in a technical business, content is king. Commercial communication in the investment business should ultimately answer this question: ‘Why should I give my money to you rather than to the many other managers who say they do the same thing?’ This is an ambition whose achievement relies on powerful content – clearly defined, effectively articulated and, above all, innovative. To say it should be innovative seems a cliché, but it is the most neglected attribute in investment communication. A cursory look at most marketing communication reveals that most investment managers have the same so-called ‘differentiators’. If effectively deployed, powerful content will play a key role in attracting new investors as well as retaining assets within the fund, particularly when the going gets tough (as it always does). It will show why and how a firm’s people, approach and processes are superior to those of their competitors. Fourthly, a specialist communication partner will also provide the most effective distribution of the distinctive content, ensuring that it has maximum impact in promoting the investment manager and its solutions to the intended target audience within the investors’ community.
The first premise of any successful campaign is belief in its power but, all too often, firms engage with an audience without having full conviction
The right communication partner will distribute the investment manager’s content via all relevant channels, be they traditional media outlets or new digital media channels (encompassing the likes of the firm’s website and a social media strategy). The challenge is to make all these channels work effectively and interdependently to exploit their synergy, resulting in an impactful message. Lastly, and crucially, all the above will be of little value unless the right content – be it a firm’s DNA and its supporting messages or the edge of a strategy/fund – is understood and believed by its staff. Each of a firm’s employees should be regarded as a de facto brand ambassador. Investment communications cannot be the domain of a few spokespeople – they must instead be thought of holistically. Therefore, investment managers should take coaching all team members in the company’s ethos and core messages seriously. Regular coaching sessions, as well as fostering a common culture, will ensure that a firm’s communications strategy is not undermined by individual employees portraying different images of the firm (not to mention the positive impact this activity has on people’s sense of involvement, and therefore morale). Investment managers are turning a corner in their attitude to communication. The ones who succeed will be the ones who understand that good communication can be a real game-changer. H Ermannio Matteo is COO of Peregrine Communications, a hedge fund PR specialist. Visit peregrinecommunications.com