EXCERPT FROM ARTICLE, Apollo Questions Rivals' Wealth Market Push, by reporter Tom Stabile
Indeed, private equity firms gunning for the retail market will have to invest a significant amount of work in advisor and investor education, says Bruce Frumerman, CEO of Frumerman & Nemeth, a strategic consultant on marketing and product development.
"Do these firms want to put the time and effort and financial resources to bring that [financial advisor] audience up to speed so they will be evangelists for [private equity funds]?" he asks. "It doesn't mean it's not doable, but you have to help them explain to clients the potential upside to make it worth the lockup."
A surprising number of managers also don't take the basic step of making sure their funds are suitable in terms of the distribution structure and fees for a new investor channel, Frumerman says.
"When managers come to us and tell us they're not sure why this product isn't selling, eight out of 10 times we find that the manager has not been going after the audience that is most suited to the product that they're offering," he says. "It's not a rare occurrence."
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