Welcome to Tessera’s new blog, Mosaics. Our posts will we geared to the investment industry and will discuss topics pertaining to Third Party Marketing and other areas impacting our business, like regulatory oversight and compliance. If you are looking for someone to offer you great stock tips or how to allocate your retirement savings, this is the wrong site for you. We are open to your thoughts and ideas and want to hear your feedback regarding topics you would be interested in hearing more about.
What Third Party Marketers Do?
Every time I meet new people, I am always asked the same question - What is it that you do for a living?
It's not just strangers who ask, but also friends, family, and casual acquaintances. I guess maybe, I haven’t done a great job explaining it, so let me see if I can make it simple for everyone to understand.
I am a Third-Party Marketer (“3PM”) and the role I play is no different than that any other sales and marketing professional. In my case, the product or service that needs to be sold is investment management. My main task is to identify those who might be interested in buying it.
One important difference between a 3PM and a traditional sales person is explained by the name: while most sales professionals work for one specific company, 3PMs are independent contractors, for lack of a better word, and usually work for several different investment managers at any given time.
My firm, Tessera Capital Partners, works exclusively for firms in the financial services industry. And although we are a broker dealer (like J.P. Morgan or Goldman Sachs), we aren’t in the business of selling individual stocks or bonds.
Instead we are selling the investment services of our manager clients. These can be firms that develop an investment strategy that contains similar stocks and/or bonds that are packaged into an investment portfolio. Such strategies may include blue chip common stock (large-cap equity), the stock of international companies (international equity) or the debt of corporations or public entities (corporate or municipal bonds).
We also work with manager clients that offer fund investments. These funds may also include an investment strategy that includes stocks and bonds, such as a mutual fund.
The strategy may also include options, futures, currencies and can also sell securities that it doesn’t own (shorting). These products are often looking for some inefficiency in the market and are used to offset or hedge other strategies held by an investor. As such these products are called hedge funds and come in a variety of styles including long/short, arbitrage and multi-strategy offerings.
Some funds will include investments like real estate, gold and silver (commodities), farmland or maybe a part of a company that is owned by a private entity. Strategies that own these types of assets are called Private Equity because the original owner of these items are not public companies like those issuing stocks and bonds but private entities and people.
Private Equity, together with Hedge Funds are called Alternative Investments.
Our goal at Tessera is to help identify potential investors and introduce them to the manager clients we represent.
Hopefully you have a better sense of what it is we do as a 3PM. This article has only just scratched the surface of our efforts. In the next several weeks I will explain in more detail: who we work with, how we persuade investors to work with our manager-clients and why we do what we do, or what’s in it for us?
Until next week . . .