The Research to AUM Pipeline | Warren Pies on Raising $450m in an ETF in Less Than 6 Months
Dec 26, 2024
auto_awesome
Warren Pies, founder of 3Fourteen Research and portfolio manager of $FCTE, shares insights on his remarkable achievement of raising over $450 million for his ETF in under six months. He discusses the critical role of research in attracting investor interest and how strong client relationships can redefine traditional interactions. Warren emphasizes a disciplined, long-term investment approach over fleeting trends and provides a glimpse into the unique strategies that drive his innovative ETF's success.
Warren Pies attributes the successful launch of the ETF FCTE to the established relationships stemming from his research business at 314 Research.
The firm's commitment to setting realistic client expectations allows for deeper trust and fosters long-term partnerships in asset management.
The innovative tax efficiency of FCTE's structure enhances its attractiveness to investors, particularly in taxable accounts with high turnover strategies.
Deep dives
Successful Launch of FCTE
The launch of the active ETF FCTE has been notably successful, raising over $450 million in a short period. This success is attributed to the existing relationships cultivated through the research business at 314 Research, which provided a solid client base and a proven track record of performance. Clients who had followed the proprietary investment models expressed a strong desire to invest directly, leading to an influx of capital. The partnership between the research and ETF businesses has created a unique synergy that underpins this success, highlighting the significance of building trust with clients before launching a fund.
The Value of Research in Fund Management
The research business operated by 314 Research is integral to the overall success of the fund management aspect, as it establishes a foundation of credibility and expertise. This firm initially did not come from a background of major hedge funds, but rather from a focus on providing insightful and data-driven research that resonated with clients. Client engagement and relationship-building have been key, allowing the firm to develop a loyal client base willing to invest in new products. As clients witnessed the firm's informative and results-oriented approach, they began to seek out investment opportunities, further bridging the gap between the research and ETF arms of the business.
Navigating the Challenges of Research and Marketing
Running a research business presents unique challenges, especially in maintaining a balance between providing valuable content and differentiating from competitors. Building a reputation in institutional research allows the firm to cater to sophisticated clients who expect high levels of service and expertise. Research can be a high-margin business with low incremental costs for adding new clients, as digital platforms facilitate communication and engagement. However, the firm recognizes that focusing on quality, integrity and providing genuine insights is vital amid a market flooded with subpar offerings.
The Role of Tax Efficiency in ETFs
The tax efficiency of ETFs plays a crucial role in their attractiveness to investors, particularly for strategies that require frequent trading. The structure of FCTE is designed to minimize capital gains for investors, making it a preferable choice for those in taxable accounts. Unlike many competitors that offer minimal rebalancing, FCTE incorporates a high-turnover strategy, allowing for dynamic adjustments in a responsive manner. This innovation in tax efficiency not only benefits clients financially but also aligns with the firm's commitment to providing a differentiated investment product.
Building Relationships Through Effective Communication
Developing strong relationships is central to the firm's strategy for raising assets under management in the ETF space. Engaging with clients through insightful research allows the firm to solidify its credibility and remain top-of-mind for investment opportunities. Understanding the needs and expectations of clients is essential in fostering long-term partnerships, further amplifying the potential for growth. The emphasis on genuine communication and maintaining high standards of service helps to differentiate the firm in a competitive landscape.
Having raised over $450m in less than 6 months, Warren Pies, Founder of 3Fourteen Research and Portfolio Manager of $FCTE, has had one of the most successful independent ETF launches of all time. Despite the seemingly overnight success of his fund management business, the real story is about the steady growth of his research business that feeds into everything they do. He explains how his research business has become a pipeline of investor interest in his ETF business and how research relationships flip the traditional client interaction on its head. He also discusses why he chose to focus on setting good expectations with reasonable clients rather than playing the flashy retail newsletter game.
Follow Other People’s Money on:
Apple Podcast https://bit.ly/4e7QJ1M
Spotify https://bit.ly/3Yhaazi
YouTube https://bit.ly/3C63VXR
Follow Warren Pies on Twitter: https://x.com/WarrenPies
Follow Max Wiethe on Twitter: https://x.com/maxwiethe
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
