Being a successful investment manager is not a cakewalk – far from it. It takes a particularly focused and driven individual to be able to wear all the hats required to keep a fund running smoothly and help identify the next tech unicorn.
Regularly meeting with investment analysts and company managers to discuss financial matters
Reading financial briefings
Making informed financial recommendations and decisions
Keeping knowledge up-to-date about the economy, current financial news, and financial markets
Assessing and interpreting complicated financial information
Liaising with clients.
We’ve worked with plenty of venture capital, private equity, and alternative investment fund managers – and have identified 8 key qualities that all successful managers have in common.
1. Has a Natural Curiosity
Do you love learning and have a natural tendency to want to know everything about an unfamiliar industry or concept? Then you’d likely make a great investment fund manager!
Making smart investment decisions requires a 360-degree view of all the companies in your pipeline. A savvy investment manager is never afraid to ask questions or delve deep into a topic when they don’t know the answer. Their natural curiosity encompasses the market landscape as a whole, allowing them to recognize the potential for success when they audit a business.
2. Knows a Paradigm-Shattering Innovation When They See It
Not every company you invest in will be the next Airbnb or Uber, but identifying these unicorns requires outside of the box thinking, and a strong eye to the executive leadership.
Co-founder and CEO of VentureDevs Joe Gardner wrote an article in which he broke down his process for identifying and investing in two successful startups that became unicorns:
- They had strong executive leadership teams.
- Those executive teams had experienced prior success in the industries they were now starting their businesses in.
Experience should be meaningful to you since it suggests that the founders know exactly the types of problems they are trying to solve. Along with this, the startup founders need to have a compelling story that speaks to exactly why they’re uniquely qualified to solve that particular problem.
3. Has Confidence For Days
An investment portfolio manager needs to have unwavering confidence and a strong track record of successful investment strategy to back it up. As people look to you in moments of uncertainty, it’s also key that you’re able to keep your emotions in check and base your decisions on data rather than giving in to anxiety.
4. Has an Analytical Mind
An analytical mind (or beautiful mind, as we like to call it) is an absolute necessity for a fund manager. Interpreting and correlating data from potential investment companies, your current portfolio companies, and the market as a whole is key to making predictions about the future.
5. Can Fill in the Gaps
Due diligence is a huge part of choosing successful investment opportunities (and is a process that a CFO is great at helping out with). Yet despite your best efforts, there will be times when you just don’t have all pieces you’d ideally want to base a decision on.
When there are gaps in your knowledge or analytics pertaining to an important decision, you’ll have to act strategically based on past performance and performance for similar businesses within the industry.
6. Hungry For Success
If the above qualities don’t make it evident, the life of asset management is a busy one. There’ll be hard times to go along with the good, and if you’re a bootstrapping fund then it’ll be an uphill battle toward profitability. If you’re not passionate about making connections and driving a profit, it will make it difficult to weather the difficult patches.
7. Could Sell Ice to a Penguin
Communication skills and a strong sense of conviction need to be at the core of every successful fund manager. A fund manager needs to be able to keep the ship afloat when LPs are asking difficult questions regarding performance, and be able to back up their inspirational speech with relevant metrics and financial projections. You need to also be adept at tailoring your communication to different stakeholders, telling the story, and focusing on the message that will make your case without overloading them with more detail than is necessary.
8. Endeavors to Stay Ahead of The Curve
“The only thing we know about the future is that it will be different” – Peter Drucker
Be proactive, not reactive. Keep your eyes up, and ears to the ground. Be intensely curious and investigate all trends. Be ready to pivot when necessary, while also being able to justify and articulate your decisions intelligently.
These are the qualities that make for a great investment fund manager.
Are You Looking For Investment Fund Consulting?
Our Venture Capital and Private Equity leadership team has extensive knowledge of several industries’ financial considerations and has provided fund administration to both early-stage and well-established VC and PE funds. Our consultants can provide you with all the strategic financial oversight and direction you need to manage your portfolio so you can concentrate on networking and building a pipeline of leads that are able to generate a lucrative ROI.
Contact us for a free consultation, and we’ll outline how our services can help your business reach the next plateau of success.