Asset managers, especially emerging managers, are facing numerous significant challenges while trying to build their businesses. One of the primary hurdles they face is establishing a solid brand presence in a highly competitive market. Without significant brand recognition, managers struggle to stand out, making it difficult to attract the attention of potential distributors and capital allocators.

This problem is compounded by constrains imposed by stringent regulatory guidelines that limit their marketing and solicitation efforts. These regulations are designed to protect retail investors, inadvertently hinders asset managers’ ability to proactively reach potential investors and distributors to establish and build relationships, making it challenging to effectively showcase their skills and expertise of their investment strategies.

Additionally, lesser known asset managers are typically put through a due diligence process that often involves higher-than-usual scrutiny, which is already a time consuming and resource intensive endeavour for asset managers.

This is where digitisation can make a significant impact. By leveraging technology, asset managers can tap into a open channel of outreach and execute on newer engagement strategies, ultimately leading to better management and growth of client investments.

Digitisation elevates brand recognition and builds trust

We have heard repeatedly from asset managers that limited brand recognition is one of the biggest problems they face. Despite having impressive performance metrics, they remain under the radar due to their need for an established brand presence.

Digitization is changing this by opening new channels for brand building. Alternative investment platforms now enable direct engagement between asset managers and capital allocators. This access allows managers to share insights and content typically they are unable to share in an open network.  With a less restrictive engagement model, asset managers can better enhance their visibility and credibility in the industry.

Digitisation Enable Smarter Investor Engagement

Having distributors and capital allocators signing mountain of documents and then have them transfered via faxes or email is easily the most frustrating aspect of fund investment. In Asia, over 60% of fund subscriptions are still processed via faxes.

Digitization offers a solution by simplifying the subscription and redemption processes. By transitioning these processes online, asset managers can bypass the old barriers, making it easier for investors to engage, circumventing indirect marketing restrictions, and opening doors to a broader investor base.

Digitisation automates due diligence disclosure and speed up product approval 

Normally, receiving a due diligence questionnaire from distributor is a positive sign for asset manager as it signals an opportunity to establish a new relationship.  However, completing these questionnaires and RFIs which can range from a few pages to over 50 pages can easily become a source of operational bottleneck, especially for emerging asset managers that are already thin on people power.  Delays in completing and submitting these questionnaires can have direct impact on distributor’s product approval.

Asset managers can foster quicker and more efficient interactions with their clients by leveraging digital tools to streamline the product due diligence process and digitizing essential documentation. This not only speeds up the approval process but also builds trust and transparency, the key factors in nurturing long term relationships.

Embracing a Digital Future in Asset Management

Integrating digital technologies in asset management is not just a trend but a necessary evolution. For emerging asset managers in the alternative investment space, digitisation is a powerful tool that can dismantle traditional barriers, enhance investor experience, and open new growth avenues. By embracing these digital initiatives, these managers are attracting new investors and solidifying their standing in the industry.

FundKernel will be leading the charge to move the industry forward and help emerging asset managers get discovered and get invested with our digital platform.

If you are an emerging asset managers looking to grow your AUM, come speak to us and see how we can help.

If you are a capital allocators looking for interesting strategies to meet your investment mandate, register for your account at https://marketplace.fundkernel.com.