By Bryan K. Johnson, Managing Partner – Johnson & Company

The biggest challenge and #1 priority for new and smaller managers is RAISING ASSETS.

Many new and sub-$50 million AUM managers doggedly “chase institutional unicorns” despite such investors being unsuitable given their qualitative structural requirements such as size and operational criteria.

The most appropriate investor segment for sub-institutional managers is PRIVATE WEALTH: Ultra High Net-Worth Individuals, families and Family Offices. However, these investors are not only extraordinarily difficult to identify but even more so to engage and receive allocations from. While many new and smaller managers I speak with dream of getting allocations from the elusive family office, it is more complicated than most even imagine. “Cracking the code” of raising assets from private wealth is intricate and idiosyncratic requiring patience and persistence along with a structured, disciplined and focused marketing process.

The Psychology of The Ultra Wealthy

Because great fortunes are genuine targets of attack, the wealthy come to suspect that it’s safest to trust no one and verify everything! As such, any conversation involving personal wealth is an intimate conversation centering on TRUST. In fact, every allocation is an act of TRUST not in PERFORMANCE but in the PEOPLE and PROCESSES (internal and external) across the enterprise-wide execution blueprint that generate the investment performance: ALPHA. To that end, raising assets within private wealth is a TRUST issue with a battle for hearts and minds at its core.

Successful new and smaller managers must offer an exclusive and exceptional experience for the private wealth investor well beyond a mere discussion of portfolio performance, metrics and Alpha generation. Funds focused on investment performance alone are setting themselves up to be easily dismissed and rejected, particularly in the current negative selection allocation climate for new and smaller managers.

How to develop and reinforce TRUST?

It requires knowing investors and prospects well. A comprehensive understanding of each prospects background, career history, likes, and dislikes serves as “roadmap” to engage in a way that is relevant and compelling. (Johnson & Company “profiles” individuals and families on 30 distinct qualitative and quantitative points.)

Ultra-high-net-worth individuals and families expect excellence in all areas-from top to bottom and particularly a customized, proactive high-touch engagement process. New and smaller managers looking to target this segment for the first time or expand AUM with this segment, should begin by assessing what infrastructure (human and technological resources as well as skills) is needed to succeed.

In preparation for engagement, consider a 3-step process:

Step 1:

Your client should size the opportunity set within their geographic and relational footprint to have a complete understanding of the depth of individuals and families within their area along with the presence of key intermediaries that advise such investors.

Step 2:

Do their homework before they meet with any prospect to relate on a personal level and start to build TRUST immediately. Showing they took the time to understand them helps build trust from the start. If they walk in the door and start talking about performance and products they will lose them. It’s about doing the homework and creating a unique exceptional and compelling experience. This knowledge also helps avoid making fatal mistakes that can derail things.

Step 3:

“Profile” existing clients’ by uncovering who they know. It will make it easier for them to begin the “informal” vetting/due diligence process. People do business with people they know and TRUST. Unsolicited engagement in the form of cold emails and cold calls are taboo. There is very little of that behavior in the private wealth space. New business is almost all referral-based, whether from existing intermediaries accountants, attorneys, or the like. That’s how you “organically” grow AUM. Given this, new and smaller managers should use information gathered from the “profiling process” to create “prospect lists” based on who their existing investors know. Here is how it can work: Identify a investor’s personal, professional and social affiliations (foundations, endowments, board memberships, etc.). As a general rule, every private wealth individual or family knows 3 others like themselves! Review the profiles built on these contacts to decide which individuals may be considered ideal investors Develop an engagement strategy for each prospect to set up an introduction. In terms of best practices, they should be as specific as possible in the request for an introduction, the probability of getting it goes up exponentially. The more targeted and explicit the request, the more likely it is to be honored. This approach minimizes the use of the investor’s social capital, which is a key asset for private wealth. Plainly: Information is Power. This illuminates the fact that information can help connect with the wealthy. Naturally, everything else must be in place as well, such as the right product offering and service levels. But creating TRUST based on personalized information is a crucial point of differentiation in the private wealth segment.


Prospecting and raising assets within private wealth presents unique challenges for sub-institutional managers that require marketing approaches beyond merely investment performance discussions. As a leader in the private wealth space for sub-institutional managers, Johnson & Company has developed a number of essential best practices strategies, tactics and skills for private wealth engagement that have consistently opened doors. To give you a headstart in working with your clients, the following are some guidelines:

  • Best Practices in Private Wealth Prospect Research – Build granular, high integrity profiles of current investors as well as prospects to sustain organic AUM growth. The acquisition and analysis of personal/social, professional and financial data will help in background diligence that provides the intelligence to grow relationships and compress the allocation cycle by firmly and consistently establishing TRUST.
  • Best Practices in Private Wealth Engagement Strategy – Develop, plan, and execute highly relevant collateral, presentations and content that attracts private wealth to steadily move relationships to the point of “actionable conviction”.
  • Best Practices in Private Wealth Prospecting – Learn how to uncover prospects via profiling existing private wealth investors who are ultra high net worth but lack visibility and awareness of you, as well as prospects who are connected to existing investors.

The above is excerpted from the marketing and fundraising consultation/assessment/training/advisory sessions we provide to new and sub-$50 million AUM managers on a monthly basis. If you are interested in attending our next monthly sessions “January Jumpstart” on a complimentary basis contact me for dates and locations.