I have spent the past 15 years of my life building models and I love it. What can I say...I'm a geek. Since leaving the buy-side I have spent less time building models and I have missed it.
My new business has me back in the saddle building a big fat model in order to help build, manage and forecast the business. For all of you model geeks and quant-jockeys out there here's a taste.
This is the biannual sales bonus formula for my soon to be hired sales people:
=IF((L13+K13+J13+I13+H13+G13)*'Expense input'!$B$34<(('Expense input'!$B$32*'Expense input'!C11)-('2010 Rev & Exp'!$D$32*12))/2,((L13+K13+J13+I13+H13+G13)*'Expense input'!$B$34),(('Expense input'!$B$32*'Expense input'!C11)-('2010 Rev & Exp'!$D$32*12))/2)
For all of the normal people out there...if you know of any GREAT sales people or IR Pros in the Boston area (South Shore in particular) looking for an exciting new opportunity please have them leave a comment on my blog and I would be happy to speak with them. The opportunity is big and the compensation is real. The business has not launched yet but the gloves are about to come off and we are going to come out swinging!
Thursday, August 20, 2009
Tuesday, August 18, 2009
Follow the money
When selling to the buy-side one can target a market by the number of investors in a given geographic area or by AUM. I decided to divide the collective AUM for top institutional investment cites by the number of buy-side professionals employed within those cities to determine the "Money Density" of each city and the results were surprising.
The top buy-side city for investor headcount is New York and by a wide margin. This came as no surprise to me.
New York City has more professional investors than any other city in North America. New York City also has more assets under management than any other city in North America but the AUM market share position is far less pronounced. New York City has a much higher relative percentage of hedge funds to traditional asset managers when compared to Boston which helps explain the following AUM slide.
It is important for IROs to understand that most hedge funds deploy leverage which amplifies their investable assets. Therefore AUM in hedge fund heavy geographies such as New York City and Fairfield County CT most likely understates the buy-sides purchasing power by a significant margin.
When you take the collective AUM of a given city and divide it by the number of institutional investment professionals working within that city you find what I like to refer to as the Money Density for that city. This measure of purchasing influence should help redefine IRO and FinTech vendor targeting strategies.
When Money Density is taken into account the primary buy-side target list is turned on its head. This bar graph simply illustrates how much money is under management per analyst and portfolio manager in each city. Meetings in San Francisco, Atlanta and Minneapolis represent more buying power than meetings in New York, Toronto and Fairfield County CT.
The high Money Density cities are also under penetrated on a relative basis versus the low Money Density cities. Investors in these locations are less inundated with requests for meetings and therefore more likely to meet with you.
The top buy-side city for investor headcount is New York and by a wide margin. This came as no surprise to me.
New York City has more professional investors than any other city in North America. New York City also has more assets under management than any other city in North America but the AUM market share position is far less pronounced. New York City has a much higher relative percentage of hedge funds to traditional asset managers when compared to Boston which helps explain the following AUM slide.
It is important for IROs to understand that most hedge funds deploy leverage which amplifies their investable assets. Therefore AUM in hedge fund heavy geographies such as New York City and Fairfield County CT most likely understates the buy-sides purchasing power by a significant margin.
When you take the collective AUM of a given city and divide it by the number of institutional investment professionals working within that city you find what I like to refer to as the Money Density for that city. This measure of purchasing influence should help redefine IRO and FinTech vendor targeting strategies.
When Money Density is taken into account the primary buy-side target list is turned on its head. This bar graph simply illustrates how much money is under management per analyst and portfolio manager in each city. Meetings in San Francisco, Atlanta and Minneapolis represent more buying power than meetings in New York, Toronto and Fairfield County CT.
The high Money Density cities are also under penetrated on a relative basis versus the low Money Density cities. Investors in these locations are less inundated with requests for meetings and therefore more likely to meet with you.
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