Question 1

How do you source new managers?

Accepted Answer

Over the years, we have used a variety of methods to source new managers. Initially, we sourced through referrals, word of mouth, existing managers, other third-party marketers, or personal networks within the industry. Most of our successful partnerships have come through our network of industry contacts and referrals from current and former clients.

Question 2

Do you work with single product firms or multi-product firms?

Accepted Answer

Arrow Partners has found that our best results are achieved when our managers focus on a single strategy, team or process.

We believe successful partnerships occur when managers focus on what has made them successful and their core competencies.

Question 3

How long is a typical contract?

Accepted Answer

In our 30+ years of experience, we have found that 3-5+ years is the typical period to achieve our asset goals dependent on the readiness and market awareness of the manager. The sales cycle to meet and educate the marketplace about the manager's value proposition and track record, develop the sales pipeline and secure allocations has become increasingly harder and lengthened over time.

Question 4

Do you require exclusive assignments?

Accepted Answer

Exclusivity is important to effectively execute a methodical sales and marketing program that generates the necessary momentum within a channel and leads to sustainable activity and asset growth.

In either case, what is needed is time: to enhance the story, to develop appropriate materials and tools, to position the firm in the marketplace.

Exclusivity provides the commitment we both need to successfully execute our time-tested and successful strategy.

Question 5

How are you compensated?

Accepted Answer

As sales professionals, we are accustomed to incentive compensation. Arrow Partners is confident in our ability to successfully growing assets on behalf of our clients; therefore, our compensation agreement weighs heavily on assets raised.

In addition to incentive compensation, there are investments that need to be made to execute a successful sales and marketing strategy. These include but are not limited to collateral development and production, database population, DDQ/RFI production, T&E, social media and market awareness. We typical include a quarterly expense budget to partially offset the support of the program. In all cases, this investment is significantly lower than the cost to build a team of resources internally.

Question 6

How many managers do you work with at a time?

Accepted Answer

Currently, Arrow Partners' optimal roster size is 2-4 manager clients. This concentration enables us to remain focused and committed to the goals of each manager.

Question 7

Do you work with emerging managers?

Accepted Answer

Our emerging manager clients have been among our most successful stories to date. Emerging managers tend to be smaller, more focused, and in the greatest need of our expertise, so they have been a natural source of opportunity.

We like managers who have strong institutional characteristics but are not well-known or remain beneath the industry’s radar.

Question 8

What does Arrow look for in a manager?

Accepted Answer

We evaluate managers using the same criteria that investors and consultants’ use, looking at managers through the eyes of institutional investors.

On a qualitative level, we look at their strategy, what sets them apart, and what it is about their processes that will provide stability and consistency in the future. we want a manager that is differentiable with “staying power.”

Arrow Partners wants to see a track record that demonstrates a consistent ability to outperform its benchmark and peer group. Our preference is, and always will be, to work with good stock pickers, typically high conviction portfolios.

We know we have found a promising manager when we ask ourselves: why haven’t we heard about these people before now? In other words, we appreciate under-the-radar firms that employ great people and winning strategies but suffer from poor or non-existent marketing.

Question 9

In what market segments or geographical areas does Arrow have strengths?

Accepted Answer

Arrow Partners focuses exclusively on the US market.

Because they are the gatekeepers to the institutional market, Arrow spends approximately 80% of its time marketing to Investment Consultants, sub-advisors, and Registered Investment Advisors. The remaining 20% of our time is spent directly with large institutional investors.

Question 10

Do you oversee client servicing?

Accepted Answer

We are sales and marketing specialists and believe that client servicing requires a different skill set.

Although we do assist with client service at a higher relationship level, our clients usually have internal client service associates. If not, we may help them find the right resources to manage the day-to-day client servicing.

Question 11

What happens when a relationship "does not work"?

Accepted Answer

Whether business or personal, bad relationships are a waste of time and money (not to mention the opportunity costs).

Arrow performs extensive due diligence upfront, relying on multiple datasets, including feedback from prospective investors. We use such information to formulate and set a plan and realistic expectations.

In our experience, relationships between third party marketers and asset managers frequently break down over unmet expectations combined with unclear communications. We work hard at establishing and reporting on measurable metrics beyond asset raised to measure asset raising momentum and limit surprises systematically and objectively along the way.

If circumstances or market conditions change, re-positioning or an altering of expectations may be required.

It is not unusual to have difficulties in a sales process (portfolio under-performance and failing in the final presentation are not atypical difficulties). In such trying times, having the foundation to persevere is critical.

Question 12

Do you play an active role in the industry?

Accepted Answer

We are a founding member of the Third Party Marketing Association, and we continue to play an active role.

In the investment industry, we never stop networking and deepening our relationship base. We maintain day-to-day interactions with consultants, investors, managers, service providers and other 3PM firms.

We believe these interactions keep us apprised of all industry trends which may affect our business, and that of our clients, now and in the future.

Frequently Asked Questions

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Arrow Partners FAQs