I am wondering about Institutional Sales roles, what do they look like at your firm, specifically those that are pitching to retirement plans, and endowments and foundations. What is the sales process like? What are these guys selling, just funds or OCIO? Do the salesmen focus on selling just one fund/asset class, or more of a comprehensive solution?
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I don't think that I've ever pitched a retirement plan. Most are operationally unable to utilize the products that I support.
As to real institutions (These are generally sovereign wealth funds or places with names that end in -ERS or -TRS) there is generally an early meeting process to get on their radar. After that there is a RFP (Request For Proposal) sent to funds that they are considering. The RFP teams are generally crap. If you're lucky you will have a team that you've trained to write 50% of the proposal and draft another 25% that needs to be edited. Generally, you will write up a proposal for a SMA (Separately Managed Account) at a significant discount to the fund and see if they bite. After the submission there may be some further discussion between the wholesaler and the institution, but it is VERY different from the retail sales process used with FAs.
That's interesting, thanks! How is it different than the retail sales process? How much cold calling/prospecting do you have to do?
Do you mind sharing what type of comp you can make in institutional sales? How does it compare to retail?
As to cold calling, I expect there isn't much of it. There aren't that many hundred-billion dollar pension funds out there. You'd probably spend a lot more time figuring out the right phone number than making the call.
I know a firm a boutique AM which primarily sell funds (with a separate fee agreement) or the fund strategy (which is similar to the fund, but might have a few adjustments). OCIO is possible, but not that important.
In general there are "local" sales teams or partners located in the major cities covering all funds and asset classes. They are mainly there to build up a network (primarily with institutions and consultants) and thus are responsible for the first contact with potential clients. As they sell different funds and asset classes they are not specialized.
If somebody shows interest you get an RFP (with endless questionnaires, Excel files etc...) which the RFP team handles. In general sales and portfolio management team helps the RFP team out with certain information. These teams are all located in the central office. It is also possible that somebody invites you to present right away (either face to face or by doing a video conference).
In case of an RFP, in general it takes some time to hear back and as there are a lot of firms competing, chances are quite high that you don't move to the next round. If you do advance, the local sales teams plus the portfolio managers and client portfolio managers from the main office get to present. This goes on until the final round (the further you progress the more senior people and the more investment people (i.e. portfolio managers join in).
Cold calling isn't really done in our case, but it is obviously important to know people and get your name out there (especially as a boutique). Also, compared to retail, the process is much more technical. People want to see numbers and figures and legal fine print in the RFP. Only later do yo get a chance to present your "story", i.e. how you invest.
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