Targeting RIAs or HNW?
Hi folks, I run separately managed accounts based on a small hedge fund I manage that follows a specific, deep value investing approach (no leverage, long-only, micro-mid cap focus, ~12 month holding period, low turnover). I have an RIA from a legal and compliance perspective which serves as the manager of the SMA and I'd like to build assets. My main question is whether what I have would make sense to market directly to indie RIAs vs individuals?
My current SMA investors have on average, account sizes of $200k or so and my strategy requires a $100k min to be cost effective (I hold about 25 positions). The problem is what I do tends to be a tough sell. I buy a lot of poor businesses and take a very very deep, fundamental approach to investing and valuation and most people have neve heard of the stocks I'm investing in.
As a result, I'm in a quandry where I'm not sure I want to cold call HNW because I suspect they generally tend to have all of their assets housed with a priv wealth mgr that doles out the assets to specific strategies and trying to get a good dialogue regarding deep/distressed value investing can be difficult. In addition I don't have any interest in managing other strategies or doing things most RIAs do, I just want to build a business based on this specific approach to investing.
So would specific indie RIAs have an interest in this? I live in CT and there are a lot of smal boutique RIAs. Would it make sense to cold call those RIAs regarding my strategy and then offer some sort of fee split? I charge 1.5% on my strategy and could split fees w/these RIAs. That way the RIAs could generally self select clients of theirs that would be a good fit for what I'm doing.
Anyways, any input is appreciated.
Well, it might help if you list your level of experience, educational background, track record, etc.