Friday, March 1, 2013

Advice About Investment Conferences


Advice About Investment Conferences

A brief report from Mark Scott, a Deal Book correspondent, reminded me that most investment conferences are a waste of time.[1]  Mr. Scott was on assignment in Berlin to cover the Super Return Conference.  Here’s the biggest highlight from his report:

More than half of the 1,400 attendees are from private equity firms, while only a quarter are institutional investors and the like. The remainder comes from companies that offer services to the industry.

A London-based company, International Centre for Business Information, sponsors these get togethers all over the world.  This one happens to be focused on private equity.  There are dozens of organizations with same mission: getting investors to attend conferences frequented by asset-gathering money managers.

The Boss's View (1999)

Mr. Scott’s report encapsulates the absurdity of these gatherings.  Imagine the scene.  Roughly three hundred investors spent three days being tracked down by over 700 private equity professionals and another 400 vendors.  We’ll get to the panels and speeches in a moment, but the real action takes place in posh restaurants, the hotel bar, and the foyer outside the meeting rooms.  Every conference has the identical and laudable goal of providing attendees with education and insight into the latest products and trends.  In fact, investors will go home with a thick three-ring binder full of material, or if it’s a progressive conference, a USB flash drive containing all the slides. 

Here are the first two pieces of advice from a conference veteran.  If the conference furnishes you with a binder, quickly tear out the three or four pages of useful information and discard the rest.  It never makes sense to haul a heavy binder back to your office unless, of course, you need it as proof that you attended a “weighty” conference.  In most instances, the agenda should suffice as proof.  If the sponsor furnishes you with a flash drive erase all the material, and use the drive for some other purpose.

Money managers and vendors underwrite conferences by paying fees.  The bigger the fee, the more access they get to investors.  It’s really that simple.  Frankly, the money manager isn’t interested in all the investors who attend the conference.  Most of the investors are just filler because these attendees aren’t decision-makers, and thus can’t help the manager raise his next fund.  The most astute money managers attend conferences in order to influence a small group of key decision-makers.  They put up with the speeches and panels in order to have a chance to play a round of golf or have dinner with a critical trustee, director of an asset class, or CIO.

The conference agenda is always several pages long consisting of keynote speeches, panels, and breakout sessions.    My advice is to attend a couple of the keynote speeches.  They’ll be worthwhile as long as your goal is to be entertained rather than informed.  The best speakers have enormous egos and complete certainty about the best places to invest (with them, of course).  In my experience, you can skip the rest of the conference because the presentations fall into one of two categories.  Either the panelists will present ten-minute infomercials about the efficacy of their product, or they’ll slap together a haphazard introduction to a particular topic.  In fairness, every now and again, an academic appears on a panel with some interesting insights. 

Why are the presentations so poor?  The panelists are busy people who don’t have time to really address the topic at hand.  Perhaps they spent twenty minutes on the plane preparing a few notes.  Most often they don’t discuss the subject with the other panelists until moments before the session begins.  In the end, it doesn’t matter.  As I’ve explained, the three page agenda isn’t the real purpose of the conference.

If you can’t resist the attractive locations and exclusive dinners, then you can make the conference worthwhile by taking a walk or going on tour with a couple of other investors.  You might learn something from one another and avoid the hordes of money managers trying to separate you from your money. 



[1] http://dealbook.nytimes.com/2013/02/27/in-the-hunt-for-capital-private-equity-executives-outnumber-investors/

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