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In the money management business the portfolio manager has two main jobs. The first is to deliver performance that is considered to be within the ballpark of acceptance. The second is to be able to educate and persuade prospective investors and those who influence them to understand and buy into how they invest. The first job is data based, but the second job requires the ability to effectively communicate subjective-based, beyond-the-numbers information. That requires a lot of clear thinking, and then being able to put those thoughts, clearly, into print. Is your firm getting it right in writing?
Not just an academic exercise
A few years ago, academic researchers conducted a textual analysis of the investment strategy descriptions that hedge funds posted at online hedge fund performance and information databases used by institutional investors.
What they found, after accounting for past fund performance, was that sophisticated investors tended to invest more with hedge funds whose written content about their investment strategy employed a wider vocabulary than with those who wrote in complicated sentences and repeated word usage. Long, convoluted, poorly written sentences do no good for the reader or writer. While there is nothing wrong with addressing complexity it needs to be written about in a cogent and compelling way.
Something many emerging managers have not recognized is that ever since the 2008 market crash sophisticated investors have been demanding longer, more detailed explanations about how a hedge fund (or any money manager for that matter) invests. For portfolio managers who may have little or no track record this very content is crucial to survive and grow assets enough to stop having to personally bankroll the running of their businesses.
How descriptive is your firm’s strategy description?
As my 39-year-old financial communications and sales marketing consulting firm notes to its clients, there are two strategy descriptions an investment management firm needs to write up to communicate with and market to sophisticated investors: the short version storyline strategy description and the long version storyline that also includes more extensive strategy implementation information. This is otherwise known as the investment process explanation.
This important content is beyond-the-numbers information, and it is what money management firms of all types find the hardest to effectively communicate.
The short version storyline strategy description is the brief explanation about running the investment process that a money management firm writes as a few sentence DDQ response to the question of strategy. This same copy is also typically the complete text that appears in a flipchart pitchbook about investment process. However, this content is nowhere near complete enough for sophisticated allocators to judge whether they believe the way the firm says it invests is a sensible enough methodology to win a mandate allocation. Such truncated strategy descriptions rarely deliver enough information to clearly differentiate a firm from its competitors.
Also at issue, from a fund marketing perspective, is whether the written content being handed over in asset raising efforts is just generic overview type language found to be used by most money management firms, or content that actually delivers more detailed information about the portfolio manager’s asset class specific marketplace views and steps taken to seek out alpha. The former type of strategy description is what comes across to sophisticated investors as being a commodity-like manager choice, easily replaceable as soon as performance lags; while the latter type, communicating some of the personality and character of the particular manager’s approach, adds subjective-based investment process detail that helps shape a brand identity for the money management firm — all based on how it thinks and runs its portfolio.
What can deliver a good, full investment strategy description for the sophisticated investor? This is where the long version storyline about how the money management firm invests comes to play. This content needs to address investment beliefs and the strategy implementation steps taken to assemble and manage the money management firm’s basket of holdings.
You cannot afford to too quickly write this process information as you may end up delivering a muddled, opaque explanation. Additionally, the written explanation needs to align with the verbal explanation delivered at in-person sales meetings with sophisticated investors. Contradictions between written and verbal explanations describing the investment process raises red flags for sophisticated investors.
Cogent and compelling writing that communicates how a money manager thinks and the process used to run the investment strategy is both a significant differentiator that can separate portfolio managers from peers, it also makes the due diligence analysis job of the sophisticated investor easier.
Are you planting asset raising seeds with your firm’s writings?
Clearly written and properly detailed communications requirements go beyond the explanation of strategy. Sophisticated investors are also judging a prospective manager on which they are conducting due diligence when reading and analyzing their writings about performance reporting analysis in monthly and quarterly letters to investors, in their stock research reports, asset class related market commentaries and white papers on issues that relate to seeking out investment opportunity or managing portfolio risk.
While such written communications and marketing materials are provided to a money management firm’s current investors and the prospects with whom it is in direct contact, seek out additional outreach opportunities to leverage these writings further.
Always keep in mind that sophisticated investors have read so much content from so many money management firms pitching for their business they do not have much tolerance for poor writing. Better written content comes across like a breath of fresh air — wanted, but not always found.
Money managers who are doing a good job with their second key job — successfully educating and persuading prospective investors and those who influence them to understand and buy into how they invest; and being able to do so in print — are much more likely to be perceived to be better money managers than their competition.
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© 2026 Frumerman & Nemeth Inc.
Bruce Frumerman is CEO of Frumerman & Nemeth Inc., a 39-year-old financial communications and sales marketing consultancy that helps financial services firms create brand identities for their organizations and develop and implement effective new marketing strategies and programs. Frumerman & Nemeth’s work has helped money management firm clients attract over $7 billion in new assets, yet they are not third-party marketers.
Frumerman & Nemeth is internationally recognized for its work in crafting for clients the beyond-the-numbers story of how they invest — content that investment committees actually discuss, debate and vote on behind closed doors when considering firms on a short list for potential investment. Importantly, this is required due diligence content that cannot be communicated in pitchbook format.
Frumerman & Nemeth’s work also includes providing strategic consulting on product and strategy-specific branding, crafting the required strategy-specific content detail and designing and producing the marketing tools needed to make it through the two-month to two-year institutional selling cycle. Clients also employ Frumerman & Nemeth to help promote the intellectual acumen of management — helping them get speaking opportunities, write and give speeches as panelists or stand-alone speakers at industry conferences, and through media relations marketing services.