At the annual LP meetings I’ve been working on, I have noticed that the senior guy wants to give his views on the macro economic picture.
He wants to do this for good reasons: To put the results his team will report into context, and to demonstrate his broad knowledge of economic cycles in order to put his investors at ease: “You are in the hands of a seasoned pro,” is the message.
But there are a number of problems with this kind of tour of the macro.
First, the audience comprises institutional investors. They already know what’s going on in the markets. They read the papers, watch the news, and subscribe to trade publications. No matter the perspective of the senior guy. To his investors, it ain’t gonna be news.
Second, investors come to hear about their investments, not to hear a lecture about the economy. Their job is to go to the meeting, make sure everything is working according to plan, and report back to headquarters that their money is being put to work wisely…or not.
Third, LP meetings tend to be long and the macro lecture makes them longer. This frustrates investors and undermines the quality of their experience at the meeting. Since the annual LP Meeting is one of the key “branding moments” for the manager, it would make sense to keep the meeting lively.
Fourth, because professional investors have multiple managers, they go to many meetings and hear the same macro view multiple times. If your meeting is not the first they attend soon after the New Year, your senior guy is most likely telling them something they have already heard.
It could be that the decision to have the senior guy give a macro view is necessary because other senior guys are doing it, and if your own senior guy doesn’t put forth his view, it might occur to the investors that he doesn’t have one.
It could also be that nobody wants to tell the senior guy not to give his macro view.
My view is that the manager should do a little survey of investors before the meeting, and after as well. The answers to the questions will guide the manager as he allocates his precious time with investors to the subjects of greatest importance to the audience. And the key messages the manager wants to get across can be repeated in the presentations of the various funds and underlying assets in the portfolio.
Let the senior guy be the benevolent host, and let the hands-on managers speak to the audience about what they (the investors) came to hear.