Fund Management - Updates, News and Advice

2015- What is going to be your Blue Ocean to Swim In?

November 12, 2014

I was fortunate enough to have not made it to University but started my career at night school learning and passing the London Stock Exchange Exams. Much later in 1999 I was given the opportunity as part of a redundancy package to elect to attend INSEAD on its IEP programme.

Like every business school you hear a lot of Mantra’s but one that struck me there and has applied to my life ever since was the Blue Ocean Strategy- I will not try to explain it in detail but it calls upon the entrepreneur to look at his or her business world, deconstruct it and then reconstruct it again. It wants you to move away from thrashing about competing in the red sea full with the blood of failing companies but finding that path to swim in the very profitable Blue Ocean under the golden sun.

It may sound fanciful but it is illustrated by some famous examples such as the Circus Industry and the arrival of Cirque du Soleil or the development and marketing of Chinese Gooseberries in New Zealand as Kiwi Fruit.

So how do you see your particular Fund or Fund Management Company? Are you thrashing about in the red sea of competition and despair pointing out the marginal improvement in performance if investors are willing to invest with? Or are you smiling sitting back putting your deck chair up besides the Blue Ocean watching the sun set certain that the course you are on will be proven right over time. I suspect the former or you would be reading something else.

So how to change the way you look at what you do?

Firstly Stop being a Fund Management Company!

It’s the big business model and I suspect if you are reading this not your existing business model but one you aspire to down the road. Recognise you are a niche, boutique and your major strength is your unique investment process. It is how you use the same investment tools to analyse and produce above average returns to the sector you are in. It is what gets you excited and evangelical and keeps you hungry to do better. Secondly surround yourself with good people to delegate operational business management. A strong business skeleton is worth its weight in gold in the Due Diligence Process. Trust them to do their job as they trust you to do yours.

Thirdly the Investment Process Manager cant do everything nor build and maintain every long term investor relationship. Find good people who know how to listen and also are not afraid to tell bad news. Your investment process will not be right all the time but you want the investor to understand why it will be in the long term. You also want your investors to tell your team what they are thinking is their needs in the future. Recognize there are only glass ceilings you put in place in your business and personal life.

So as a first step read the book “Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne.

Then think about it.

Then come and talk to me. I am sure I can help.

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