Quarterly reporting season is wrapping up for many investment managers, or at least it should be.
Shortly, managers will begin receiving emails from a few specific databases informing them something to the effect of: "Your database profile is only 60% complete. As a result, you missed out on 500 searches this quarter."
Are these emails legitimately pointing to holes in your investment data strategy? Hardly. In fact, these emails are mostly nonsense.
A Screen is Not a Search
Databases can track activity and segment it by characteristics including asset class. However, these are gross numbers that don't account for mitigating factors—similar to how gross returns differ from net returns.
The "gross search statistics" fail to account for the purpose behind searches. Is it:
- Competitor research? This is a screen.
- Basic market research by a consultant? Screen.
- Initial due diligence for a client? Screen.
- Research for a financial journalist's story? Screen.
- An intermediary with a new placement? This is a search.
Only one scenario constitutes activity a manager cares about: placement of new money. Only the fifth scenario matters for business development.
What is the Intent of the Activity on the Database?
Nobody knows why searches and screens are being run. Search activity remains closely guarded, and databases cannot determine user intent. Since many database subscribers are asset managers themselves, their screening activity reveals nothing about a manager's data strategy quality.
60% Can Be Better Than 90%
Industry experience shows that depending on positioning, a 60% complete profile can outperform a 90% complete one. Why? Because this industry is still "sold" rather than "bought."
Nobody is finding managers on a database, reading their website blogs and research notes, and then committing millions of dollars to them, sight-unseen. Relationships and sales strategy remain critical.
A strategically managed profile with selective data gaps creates questions that prompt consultants to reach out directly—generating valuable unsolicited inquiries. A profile packed with complete data eliminates reasons for contact, disadvantaging your firm competitively.
In the End...
Database subscriber activity is far more nuanced than some vendors suggest. The assertion that incomplete profiles cost you meaningful opportunities is misleading marketing designed to drive more data submissions, which strengthens a database's market position.
Even a 98.7% complete profile will still generate these emails.