Episode 24: $1.2B Boutique CEO Manish Khatta of Potomac Fund Management on The Power of Branding | Insights into His Modern Marketing Playbook He Used to Add $1B in 3 Years
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The investment world has evolved. Success on Wall Street isn’t reserved for middle-aged white men in fancy NYC offices making deals and dollar calls like old cliches would have you believe.
Our guest today, Manish Khatta, is living proof that breaking the mold can lead to incredible success. He's the CEO/CIO of the rapidly growing boutique, Potomac Fund Management, and he managed to boost the fund by $1 billion in just three years.
How? By doing something different—being a relatable, authentic human in an industry where that's not the norm.
In this episode, he’s sharing his growth secrets and discussing:
His backstory – From stepping into Potomac straight out of college to taking the CEO seat
How he transformed Potomac, adding a billion dollars in just three years
Brand building for startups – why playing the long game is key
Why shying away from collaboration is a major Achilles heel for advisors
About Manish Khatta:
Manish Khatta is a quant, who has spent his entire career creating and refining technical trading strategies. A lifelong Potomac employee who programmed the initial work behind Potomac’s mechanical trading systems.
A father of 4 and running an RIA firm that leads with content and transparency. Manish loves playing tennis and being on the water.
TRANSCRIPT
Below is an AI-generated transcript and therefore it may contain errors.
Manish Khatta: [00:00:00] When I did this Joel presentation, I was kind of nervous because it was, there was an Eminem clip in there, right? Oh, I didn't see that. Well, yeah, there was a whole Eminem clip that everyone told me not to play. You know, my wife was like, I can't believe you're even doing this, but I really thought it was the greatest marketing message of all time in pop culture that advisors need to embrace.
Manish Khatta: And it was the, the rap battle scene where they're saying all these things to him. And, and at the end of it, he gets this light bulb where he's like, you know what? Why don't I just tell them exactly who I am, like, you know, I am white trash. I do live here. I do live with my mom and he goes to all those things.
Manish Khatta: And the other person is sitting there baffled because they don't know what to say now. Right. And so part of the presentation was, listen, when you're talking to clients or when you're marketing the people, the old school mentality is let me not say anything that might come back as a negative, or let me avoid questions.
Manish Khatta: Let me avoid questions about fees and, and whatever it may be. Whereas we took the idea and said, why don't we just show them everything we're about and beat them to [00:01:00] it, right? That's right. Take it away. Yeah, just take it all away right to start and then what happens is it's funny how then you attract, you know, Who you want to attract, right?
Manish Khatta: And so yeah, I think that's the best message. That's
Stacy Havener: brilliant. Did you show it at
Manish Khatta: Joel? Yeah, it was on the main
Stacy Havener: screen. And what was the feedback you got? I bet it was
Manish Khatta: phenomenal. Yeah, I mean, they loved it. Of course. Listen, I curse a lot. I get it. Some people don't like that. But, uh, I wanted to play that because I do think that that concept is what advisors struggle with the most.
Manish Khatta: And a lot of businesses, you market your strengths and you hide from your weaknesses, your perceived weaknesses. Right? And my whole thing is. Take those perceived weaknesses, wrap them up in a pretty little box and throw them at your prospects and just beat them to the punch, right?
Stacy Havener: Hey, my name is Stacey Havener.
Stacy Havener: I'm obsessed with startups, stories, and sales. Storytelling has fueled my success as a female founder in the toughest boys club, Wall Street. I've raised over 8 billion that has [00:02:00] led to 30 billion in follow on assets for investment boutiques. You could say against the odds. Yeah. Understatement. I share stories of the people behind the portfolios while teaching you how to use story to shape outcomes.
Stacy Havener: It's real talk here. Money, authenticity, growth, setbacks, sales and marketing are all topics we discuss. Think of this as the capital raising class you wish you had in college mixed with happy hour. Pull up a seat, grab your notebook and get ready to be inspired and challenged while you learn. This is the billion dollar backstory podcast.
Stacy Havener: There is an old guard in the investment industry. It's the stereotypical one in all the movies and books. Picture it, a bunch of middle aged white men sitting around a long conference table in a big, fancy office building in New York City. They're talking about stocks or [00:03:00] bonds, buys or sells, while a boiler room scene of dialing for dollars plays out around them.
Stacy Havener: There are narratives and industry constructs that still persist from that old guard. What the investment world should look like. Who should lead how sales and marketing should be done. Today's podcast guest is not that, not at all. My friend Manish Khada is the CEO and CIO of the fast growing investment boutique Potomac Fund Management with 1.
Stacy Havener: 2 billion in AUM. Potomac is the first job. That Manish got out of college. It's the only company he's ever worked for. It just so happens he now owns the joint. This is an inspiring story of commitment and perseverance, but it's also a masterclass in modern marketing. The new guard is here. Take note and take notes and cue Tupac.
Stacy Havener: [00:04:00] All eyes on Manish. Let's dive in. Okay, this is so fun for me because Manish and I have been friends on LinkedIn from afar for years and this is literally the first time we are sitting down face to face if you want to call it that to talk and everybody who's listening to the podcast gets to be in on that conversation.
Stacy Havener: It's going to be amazing. So Manish, please tell us That's the back story of how you came to sit here in this CEO, CIO seat of a multi billion well billion plus, right? 1. 2 billion boutique. How did this happen? What's the story?
Manish Khatta: It's a funny story to start with. So essentially this was my first job out of college.
Manish Khatta: I got out of school a year early and was going to go to law school to be a sports agent because that's what I wanted to do. That was my passion. I mean, I was. 21. I didn't know really what I want to do. So I'm sitting there and my parents are in India. They call and they tell my brother, [00:05:00] they say, Hey, you know, Manisha is not going to sit around and drink for the next 12 months until law school starts.
Manish Khatta: He needs to go get a job. And so my brother takes the burdens of a gazelle, which is a local paper. Back then they had papers classified. He circles Potomac fund management and says, go apply. And the whole goal was to apply and quit. In 12 months, go to law school. And so I apply, I started getting into the weeds with trading and operations and systems testing on the investment side and just kind of fell in love with it and the business and saw there was a lot of opportunity.
Manish Khatta: And I think also once you're out of school for six months, the last thing you're going to do is want to go back. Right. And yes, and now it's 21 some odd years later, you know, it's given the opportunity to purchase shares over the years and then in 2022, 2017. I had the opportunity to buy 100 percent of the owner out.
Manish Khatta: It was a long grind, but it started with just kind of, you know, throwing, uh, my parents [00:06:00] forcing me to get a job.
Stacy Havener: Isn't that wild? And how much do we want to reject that? Of course, when your parents tell you to do anything, you're like, that's not a good idea at all and not at all what I want to be doing.
Stacy Havener: And then here, you know, it makes sense when you look back at it, but it doesn't. You know, when you're in it, but you said something to me in the green room that I want to stay in the backstory piece a little bit because you said, you know, Potomac started when you were seven years old and I want to talk about that because one of the things I really want us to dive into is how you built this billion plus boutique.
Stacy Havener: You did it differently. You did it your way. You didn't use a playbook that anyone else was using. But we need the backstory even of the firm in order to really get that context. So can you talk about Potomac's backstory a little bit too?
Manish Khatta: Yeah, and when we were communicating prior, I wanted to make that clear that I'm not the founder of this firm.
Manish Khatta: It was started in 1986. I was seven years old. And so [00:07:00] I admit to people, like, I have no context of what happened back then. From 87 to 2003, uh, it was ran by a certain owner who then sold it to the president at the time in 2003. And that person who, who, uh, ended up selling to me in 2017. So there was two owners from 87 to 2017 before I was able to buy a hundred percent of the firm.
Manish Khatta: And I think the important part here that we're gonna unpack is you had those two owners. Different viewpoints on how to run a business, you know, what happened between those two owners and me that changed it? You know, I'm not any better of a money manager. The track record was good before I got here. The performance was good before I got here.
Manish Khatta: We had fact sheets. We had all those things. What was the catalyst that changed that? And I think that's obviously going to be the gist of this conversation, right?
Stacy Havener: Yeah, I think so, too. It's gonna help so many people and just, you know, give them a different way of thinking about it than maybe they're used to hearing.
Stacy Havener: So one more component of back story for me is [00:08:00] what was the um when you bought 100 percent of the company?
Manish Khatta: 180 million.
Stacy Havener: So that is bonkers. And what's the AUM today?
Manish Khatta: 1. 25, give or take. 1. 25 billion. Yeah.
Stacy Havener: Right. So anyone who's in this biz, and certainly if you are running a boutique, you realize how extraordinary.
Stacy Havener: That growth is because from what'd you say? 87 to 2017, they put up 180 million. You said it
Manish Khatta: just oscillated. Like when I came on board, it was like 32 million. And it just kind of just went up and down for years. Yeah, it's
Stacy Havener: hard. It's tough. It's so tough. So, and I want to come back to your backstory because something there is an interesting thread for me on the sports agent piece, because I think when we hear how you've built the biz and some of the marketing that you leaned into, it doesn't have its [00:09:00] roots in asset management by any means.
Stacy Havener: But I could see some ties back to like sports and entertainment. So I want us to keep that in the back of our minds. I want to come back to it. So, I mean, look, if people know you, which many people do talk about some of the things that worked for you going from 180 to a billion plus, like what did you do differently in your marketing playbook to get that level of
Manish Khatta: success?
Manish Khatta: Well, if I take a step back, I'm going to segue really into this. When I bought the company in 2017, within the first six months, the ink wasn't really even dry on the contract. And we ended up losing about 40 to 50 percent of our assets from things that weren't our fault. Uh, there were some changes with broker dealers and how they were moving away from direct solicitor business into platforms, yada, yada, yada.
Manish Khatta: The fact is I bought the business just at 17 immediately. Lost a punch of money. I had a 30, 000 a month SBA loan. Pregnant wife already had a kid. [00:10:00] All the financial buffer that I built into the purchase evaporated in the first six months. And so, you know, it was a lifelong dream to buy the firm, to be your own boss, to do it my way.
Manish Khatta: And then right away, You kind of are left with this, what do I do now? And we tried so many things right now. We manage money for financial advisors and we're a tamp at the time. I was like, you know what, let me just go get clients. You know, I had my, uh, one of my staff members get a CFP. We started marketing to clients.
Manish Khatta: We started doing all these things that just weren't us, right? The way we were marketing, just your, you know, suit and tie PDF brochures, same old script that people were running. The changing point for us was 2020 and there's a specific thing that we did in 2020 and I hate to say this out loud, but the pandemic is what really changed it for us because what happened is that we were all on the same page.
Manish Khatta: So if I'm competing against American fund wholesalers or larger tamp wholesalers, guess what? [00:11:00] They're at home in their pajamas, just like us. And so there was five of us at the time. And I told everyone, I said, guys, ladies and gentlemen, this is our time. You want to talk about no better time in history for a small firm to compete.
Manish Khatta: This is it. And so the first piece of content we ever made was a video of all of us at home. Struggling with working from home during the pandemic kids running in and out of the room, and it was a funny video of us trying to manage and the feedback we got. That was tremendous. Advisors just love the fact that we were showing everyone who we are and what we were struggling with.
Manish Khatta: That was the light bulb moment for us in terms of marketing that just level the playing field for us.
Stacy Havener: So that's fascinating, and because what you did, whether it was intentional or not, was you just showed up as your real selves. You were like, we're gonna make a video that has absolutely nothing to do with funds, finance, [00:12:00] like, it has to do with being a human being, in a pandemic, trying to work, and it's real.
Manish Khatta: It's listen, our marketing campaigns start with eyes on brand. It's a big tagline here. Everything we create is eyes on brand. We actually rarely put out marketing material that's fund and performance specific. Uh, 90 percent of it has nothing to do with what we do. We follow up with the 10 percent on, on the product.
Manish Khatta: But the first thing is eyes on brand.
Stacy Havener: We'll be back in a moment after a word from our premier brand partner, Ultimis Fund Solutions.
Manish Khatta: Since our founding in 1989, we believe that alternative investments are integral part of client portfolios. Unfortunately, delivering high quality hedge funds and private market exposures has always been a challenge for the wealth management industry. These type of alternative investments introduce unique [00:13:00] challenges related to taxes, qualifications, paperwork, and reporting.
Manish Khatta: As a result, high net worth investors tend to be significantly under allocated to both hedge funds and private markets relative to institutional
Stacy Havener: investors. That's Stephanie Lang, Chief Investment Officer from Homeric Berg, an 11 billion RIA headquartered in Atlanta, Georgia, that serves over 2, 700 clients in 46 states.
Stacy Havener: You can tell they believe in helping high net worth clients access hedge funds and other alternative investments. They're equally as passionate about broadening that access for all their clients, not just qualified purchasers or a select group of accredited investors. Meet Nick Darsh from Ultimas with some backstory.
Stacy Havener: Hallmark Berg
Manish Khatta: created a three C one fund in January, 1999 to provide their high net worth. And institutional investors with ready access to a [00:14:00] diversified portfolio of hedge funds. As interest in the fund grew and the constraint of the a hundred investor rule loomed, HB began exploring ways to continue expanding the investor pool without negatively affecting existing shareholders.
Stacy Havener: We'll hear more about the creative fund conversion work that made it possible later in the show. Now, back to the program.
Stacy Havener: If I put myself in the shoes of people listening, they're like, what are you even talking about? You don't create marketing materials about what you do, then what are you creating? So you have this epiphany, you create this video, and what happens next? Do you start realizing, wait, this is working and there's, there's a lane we can go down
Manish Khatta: here?
Manish Khatta: Yeah, like anything, it's not immediate success, right? We just started going down the path of art. Let's create marketing materials that literally just puts eyes [00:15:00] on our brand and head down. Let's do that for a considerable amount of time before we pivot to anything else. And I always tell this story about if you're driving down the highway and you see a Coca Cola bill billiard or billboard, whatever they're called.
Manish Khatta: Coke does not need to put that there, right? We all know who Coca Cola is. So why is the billboard there? It's this whole concept of constantly making sure that eyes are on the brand and then the product comes second in terms of following up. So I'm not saying that the product marketing is not important, but as a smaller firm that's trying to grow, no one knows who you are.
Manish Khatta: So what's the point? No one cares about your product. They don't know about it. So the first things first is getting the eyes on brand. And so we started doing podcasts and videos. And when I say literally has nothing to do what we're doing, I mean it like our most successful podcast was something called industry gossip that ended up getting anywhere from 20 to 40, 000 views per episode.
Manish Khatta: Wow. And all we do is me and my CMO. It's a five minute video [00:16:00] where we talk about news in the FinTech and wealth management space. He asked me the question. It's lighthearted. We joke about it. I answer what I see the future being for that product. That's it. And it's done. It doesn't say Potomac anywhere.
Manish Khatta: It doesn't talk about Potomac and that concept of eyes on brand. We just pressed really hard and we can come back to this later because now we're pivoting into something else, which is kind of what we're doing. Yeah.
Stacy Havener: Yeah, I want to, because I think what's interesting here is, it didn't say Potomac, wasn't really about what you were doing, but it was you.
Stacy Havener: It was you as the face of the brand, and people getting to know you, and that's something that I think our industry's super bad at. Because they're like, Oh, well, no, I can't show who I really am. I need to do kind of what you described, like, I'm going to send my representative into the meeting with the suit that everybody wears and like the, you know, the standard uniform.
Stacy Havener: Here I come, like, you know, [00:17:00] shake, shake, like here we are, right? And that doesn't work.
Manish Khatta: It doesn't, but to give people credit, a lot of people were raised in an environment where it was Wall Street. It was buttoned up. It was suit and tie. You were supposed to sell this a certain way. Technology changed that and really pandemic was the icing on the cake in terms of getting rid of that old guard because no one was at the office.
Manish Khatta: There was no Manhattan office, right? And so what followed from that was the fact that you could now embrace that side. And embrace who you are as a person and I really do believe that the way I was raised in this industry affected me and how we acted going forward because I was taught under that old guard 100 percent don't tell people who you are don't tell people why you're doing certain things in the investments, you know, act a certain way.
Manish Khatta: It got old after a
Stacy Havener: while. Yes, and you're 100 percent right that that's what the industry teaches. Like that's the industry's narrative. This is [00:18:00] what you do. This is how you do it. This is how you show up. This is what you wear. This is what you say. It's a revolution of sorts for people to buck that, it's not even a trend, just break the narrative, break the ceiling that's been put on all of us that says you can't be a person first.
Stacy Havener: Especially
Manish Khatta: if you're a boutique. I feel like if you're a big firm, you probably can't do that anymore, right? You're a corporate. No, they're not, they
Stacy Havener: don't want you to do that. No,
Manish Khatta: no, no. Embrace the fact that you're corporate and move on. But for boutiques, you're not corporate. And so, don't act like you are.
Manish Khatta: You
Stacy Havener: hit on something really powerful there, which is the things that make us different, maybe even the things that we are kind of, like, embarrassed about. I'm a boutique. I'm not, you know, one of the bigs. I don't have the army of wholesalers. Like, the things that we try to act like, let me just show up like I'm bigger than I am, so to speak.
Stacy Havener: We spend [00:19:00] so much energy on that when really the flip side is true. If we leaned into those exact things, we would repel people, sure, but we're also going to attract people who want something different. Who want to challenge the status quo, who believe there is a place for a boutique. And I think that's what you've done so well.
Stacy Havener: It's like, the bigs are fine, and there's a place for that. But there's also a place for a specialist and for a special person. And to lean into the things that maybe we're frightened of.
Manish Khatta: Well, so let me, let me touch on that because the second marketing campaign we ran after that first one about being home from pandemic was called the on hold campaign.
Manish Khatta: And essentially what we did is all of us ran videos from our desks with voiceovers of us either waiting on hold for 27 minutes, you know, how you press zero a hundred times and never get anywhere. Or they mispronounce your name. So we did four or five of those campaigns where at the end of it said, you know, there is a better [00:20:00] solution.
Manish Khatta: And we were embracing the fact that you can call us. There isn't a 27 minute hold. We're not a big business. We're a small business. And so that is a perfect example of you embrace who you are because that is who you are versus. What you're trying to become or what you think, you know, they should be, I think ultimately, like what social media in a lot of ways has taught me and doing this business the way we've done is that no matter what you do, there's always going to be a hater.
Manish Khatta: Oh, yeah. No matter what you do, you're always going to attract certain people and piss off certain people. So who cares? Right? It's very freeing. And maybe that comes with age. Maybe that comes with kids. I don't know. But. I did a presentation at Jolt and the title of it was zero Fox, F O X given. And that's kind of what we embraced early on.
Manish Khatta: And we just said we were going to do it the way we wanted to do it. And if you like it, great. If you don't, you probably weren't going to be a client anyway.
Stacy Havener: A hundred percent. And, you know, I did [00:21:00] listen to some clips from that speech when I was prepping. It was great. It was so great. And here's the thing, you know, you're right, like age, having kids.
Stacy Havener: And also there's a little something that happens when you just start realizing, like, this is difficult To do and I'm getting frustrated and I'm starting to not care anymore about what I'm supposed to do because it doesn't work. And so you start like that frustration or the chip on your shoulder starts to get bigger and more pronounced and you start realizing like, you know what, if it's not going to work, I might as well do it my way, a more fun way, something that's more authentic to us, and it still might not work.
Stacy Havener: Great. At least I tried. At least I tried.
Manish Khatta: That was what that one of those assets went down. I mean, I, I had that come to Jesus conversation with myself. I said, what's the worst that can happen? Like, I'm already thinking about what am I going to close the doors? How am I going to make this loan payment?
Manish Khatta: It's already crossing my mind. So what's the worst that can happen at this [00:22:00] point? And so if you're going to go down, you might as well go down and swing in. Right.
Stacy Havener: Yes, exactly. So you're doing these things. And if I'm right, you had a couple different versions of your podcast or different kind of channels, if you will.
Stacy Havener: You really kind of leaned into the videos and the podcasts. And what happened? Did you see an immediate change? Impact or was it just like keep going and fingers crossed like how so what
Manish Khatta: happened? Yeah, so early on my cmo who I brought on a couple years ago was a brand guy who really felt that you should make Intentional pieces that tell a story and early on we really clashed because I am a gary vanatrack guy Where you take the hose out and you just spray content.
Manish Khatta: Just get it out there as much as you can. And we clashed early on, but we finally got on the same page where we were producing anywhere from six to 10 original pieces per week. That we were putting out there. So the goal was just as much content as [00:23:00] literally possible. And we varied it. We did long form.
Manish Khatta: We did short form video audio. We'll do random campaigns. We put our fact sheet on a cereal, sent it out to journalists, sent it out to top advisors and ask them to make videos. We made a bourbon. When one of our strategies turned 20 years called bull bear bourbon, and we put a label on it and send out these bourbon to people and the whole point was just getting these conversations started and then backing it into it with the content.
Manish Khatta: Right? So, so once you hear about Potomac, you see about these silly things, then you go watch some content. Then you start clicking around. Like, what is it that these people actually do? And then that's where the other stuff comes in afterwards. Right? Yeah. That's
Stacy Havener: brilliant. And in some ways, that's how this podcast episode has started.
Stacy Havener: Like, I realize we're sitting here and people are like, Googling Potomac, like, what does Manish even do? They haven't even said it. And I love that because I don't want to say it's not the point, but sort of who we are and why we do what we do are as important, [00:24:00] if not more than what we do and how we do it.
Stacy Havener: Right. Like, as you said earlier, like you get there, you get to the product, you get to the what, but we need to start the conversation and it's probably going to happen in a different way than maybe we were taught. So that was 2020. What were your assets in
Manish Khatta: 2020? In 2020, as we're coming to year like 125, 130 ish.
Manish Khatta: So from 185 in 2017 down to about, you know, I think a little under 130 at the time. Then
Stacy Havener: you start doing this kind of, you know, content marketing campaigns, really leaning into who you are and your vibe and your culture and all these things. And I mean, that's
Manish Khatta: quick. Yeah. I mean, look, like anything, like it starts off, you know, you get some good momentum.
Manish Khatta: You know, we've got some big top clients that have been with us for a while and we made some structural business changes that allow them to come onto our tamp. And you made some business changes too. I don't want to sit here and say that it's all content, right? There's obviously. Some business aspect to it and made some good changes and started [00:25:00] raising some good assets.
Manish Khatta: And like anything, you know, you have that immediate bump and then you kind of plateau a little bit as you're finding your way. And now it's basically been about 100 million a month since last, uh, December that's coming in and new flows. So. It turned into a machine actually, to be quite frank, we, we turned off a lot of it and we'll come back to that at the end because I have a, I have a reason where I'm going with this, but, um, yeah, from 2020 is when it started, it went from about 130 to roughly 600 in a couple of years, which at that point we thought was great, you know, at the beginning of this year, we were at 600, it is great.
Manish Khatta: And so we were, we were ecstatic about it and then we just kind of hit the gas pedal and, and took off. Okay, so that's the
Stacy Havener: perfect segue. I mean, that's the true hockey stick, by the way, like it is great. Everything you got that growth is amazing. So that's a great segue, though, into the business side. So let's switch gears from content and talk about what it is you do and how it's different.
Stacy Havener: And then maybe we can [00:26:00] get into some of the business things that you Pivoted. It sounds like in partnership with your clients, which I love, that's so smart to do it that way. So talk to us about what Potomac does and how
Manish Khatta: it's different. Yeah. So there's two silos to the business that drive most of the revenue on one side.
Manish Khatta: We have tactical model portfolios that we put on other TAMPs. So the larger TAMPs that are out there through broker dealers or custodians or models be available. So if someone is an advisor out there, they. Like what we do, they can access our models on that platform. Uh, we also have four mutual funds that we launched back in 2020 as well as a scale play.
Manish Khatta: Uh, it was very hard to manage money across the industry with all these different tamps. It was actually inefficient in a lot of ways. This was better for the client, better for the experience to manage them within these 40 act funds. And every client has the same experience, no matter how they're. So those models and those funds are out there.
Manish Khatta: And then [00:27:00] we also have our own TAMP that we don't compete with our partner TAMPs, but they're just meant for RIAs who are struggling with technology and putting things together. So it's a TAMP and servicing offering where we will be their technology solution and service them as well. You know, a new thing that we're doing is we're putting a lot of money into developing our own software for a proposal and new account opening and servicing and stuff like that.
Manish Khatta: So we have a six person fractional development team right now. That's building a lot of that technology out. So that's probably the future in terms of where, where we're going to go. And in addition to the money management.
Stacy Havener: That's fascinating. How would you say the revenue kind of split is between those two sides?
Stacy Havener: Is it equal or is one significantly more?
Manish Khatta: So, you know, it started with the TAMP being more, and then it went to 50 50, and now, because of just pure scale, the models and the funds are about, so I'd say it's about 60 percent the models and the funds, and 40 percent the internal TAMP. You
Stacy Havener: said something I found [00:28:00] fascinating when you talked about your own TAMP, because you were very clear that you were not competing.
Stacy Havener: with the other TAMPs, because obviously that's where those models and those funds are living. So that's fascinating to me. So tell me, like, you could be on TAMP A and also use Potomac as basically an extension, like another TAMP to do servicing. Like, you're collaborating in some ways with the TAMPs. Like, how does it, tell me how it works.
Manish Khatta: So the thought process was, and I'm going to bring Coca Cola back in, um, to this mix. I always felt, listen, if there's a fridge out there, I want to be inside of it, right? And so I want the product to be in as many places as possible. So the TAMP was really separate. The TAMP was a solution that we have internally for RIAs who want to access not just Potomac, but a bunch of institutional strategists get the service and the technology offering.
Manish Khatta: If you're at a broker dealer or another TAMP, we don't even bother saying, Hey, come over. We're like, Hey. Stay [00:29:00] where you are because your broker dealer, it's probably better that you stay with them. We don't want to compete with them, but guess what? Just use our product there. We're perfectly fine with that.
Manish Khatta: One of the things that was a much different, the way we sold Potomac as my prior ownership here was that. This is a real issue with boutique managers. They think that their products should be a hundred percent of a client's offering. And the light bulb moment is that, you know, we are honest with people that you shouldn't have a hundred percent of anything.
Manish Khatta: And so all we're trying to be is that slice of the pie where we can add value. So for on someone else's tamp and we can add value to your Vanguard, to your American, to whatever else you're doing, slide us in for that 10 or 15%. We're more than happy. Just compliment that. One of the things that's really helped us is we partner with what other people think are competitors.
Manish Khatta: We go partner with other money managers and go to advisors and say, Hey, here's a sector rotation. Here's a small cap. Here's a tactical look how they. Work well [00:30:00] together, right? And so we ran a whole campaign called great alone, but better together. And we started marketing that whole concept of, you know, using these different players and advisors love that because they're so used to one product come in and saying, use a hundred percent of us, you want small cap here, we have something you want large cap here, we have something.
Manish Khatta: And that's obviously disingenuous, right? Because you can't do all things. Well, that's the product side of the marketing that really took off is this whole concept of. Being open about the fact that we're just a small part of the solution and we work well with these other folks. I love
Stacy Havener: that. And again, thinking back to your dream of being a sports agent and sort of like the sports and entertainment industry, I often reference that.
Stacy Havener: Like, you see so many collaborations in other industries, you know, Fashion, music, everybody kind of collabing and doing things together, and yet you get to the asset management space and like, you know, it's fight to the death, like for every dollar, and it doesn't need to be that way. It's [00:31:00] collaborating versus competing is a huge mindset shift that puts the investor, the client at the center.
Stacy Havener: Of course, no one should be 100%. That is just like, it's silly that that's even still a conversation. And so instead of, you know, fighting against it, what if you leaned into it? It's kind of like what we said before. And you did that with your campaign. Look at how we complement. Look at how well these things work together.
Manish Khatta: Brilliant. Yeah, and it was weird at first because an advisor would look at say, I don't understand. You're telling me that I should only use 20 percent of Potomac and we're like, well, in this situation, yeah, you probably should only use 20 percent and typically when we build portfolios, because we have an offering where we build portfolios for advisors, Potomac's never over.
Manish Khatta: Maybe 30 percent max, you know, sometimes 40, depending on the strategy, because depending on your risk profile and your goals and all that jazz, obviously it's not advice, but it's just disingenuous to think that you should be the only solution for them. And so it's [00:32:00] that collaborative effort that that's another old guard thing that has gone away because, you know, the old school way is no, everyone's a competitor, right?
Manish Khatta: You want to take their money. That was the thought process.
Stacy Havener: And even if they're not in your asset class, by the way, it's like, it was like everyone who's trying to get capital from these people is a competitor. The New Guard way is so much more about collaboration. I love that. I'm curious, the groups that you had in that campaign, were they like part of the campaign?
Stacy Havener: Did they know they were in the campaign? Were they like, let's do this together? Like, what did the actual collaboration?
Manish Khatta: Not at first, because they were run by gray haired suits who just don't want to do that, right? And once they started figuring out that we were actually putting them in portfolio combinations and getting referrals, they started scratching their head.
Manish Khatta: They're like, what's going on? We're like, well, we built this, you know, combination for this advisor and we included 30 percent of your product in it. And then it started taking off once they saw that, [00:33:00] okay, I see where this is going. Now we routinely, you know, help each other out in terms of. Running proposals for advisors and making sure they understand how these combinations work together.
Manish Khatta: And that's been a huge driver of assets because advisors just love the fact that, you know, we're working together and in some cases we're competitors, right? And a lot of cases, you know, there's another tactical manager that does something better than us. And we're like, Hey, just use them for that and use us for this, the equity side or whatever it means.
Manish Khatta: So it's gone really well. And
Stacy Havener: it takes a lot of bravery and a lot of confidence to do it. I think that's a thread that I'm really seeing as we talk and I'm learning more about the strategies that use. It takes incredible courage and confidence. To do something like that, and I hope that as people are listening and taking notes here, you're thinking about how you can push yourself, even a baby step in this direction, away from the old guard towards the new guard, because I do think it's game
Manish Khatta: changing.
Manish Khatta: Well, look, when I did [00:34:00] this Joel presentation, I was kind of nervous because there was, there was an Eminem clip in there, right? Oh! I didn't see that! Oh yeah, there was a whole Eminem clip that everyone told me not to play, you know? My wife was like, I can't believe you're even doing this, but Oh my gosh. I really thought it was the greatest marketing message of all time in pop culture that advisors need to embrace.
Manish Khatta: And it was the rap battle scene where they're saying all these things to him and, and at the end of it, he gets this light bulb where he's like, you know what? Why don't I just tell them exactly who I am, like, you know, I am white trash. I do live here. I do live with my mom and he goes through all these things.
Manish Khatta: And the other person is sitting there baffled because they don't know what to say now. Right. And so what part of the presentation was, listen, when you're talking to clients or when you're marketing the people. The old school mentality is let me not say anything that might come back as a negative or let me avoid questions.
Manish Khatta: Let me avoid questions about fees and, and whatever it may be, whereas we took the idea and said, why don't we just show them everything we're about and beat them to it? [00:35:00] That's right. Take it away. Yeah, just take it all away right to start. And then what happens is it's, it's just, it's funny how then you attract, you know, who you want to attract.
Manish Khatta: Right. And so, yeah, I think that's, that's the best message.
Stacy Havener: That's brilliant. So what happened? Did you show it at Joel?
Manish Khatta: Yeah, it was on the
Stacy Havener: main screen. And what was the feedback you got? I bet it was phenomenal. Yeah,
Manish Khatta: I mean, they loved it, of course. Listen, I curse a lot, I get it. Some people don't like that.
Manish Khatta: But, uh, I wanted to play that because I do think that that concept is what advisors struggle with the most. To them, and a lot of businesses, you market your strengths and you hide from your weaknesses, your perceived weaknesses, right? And my whole thing is... Take those perceived weaknesses, wrap them up in a pretty little box and throw them at your prospects and, and just beat them to the punch.
Manish Khatta: Right? A
Stacy Havener: hundred percent.
Manish Khatta: That's right. It's like that whole gym mentality of embracing the suck. It's the same thing. Embrace. You're not good at everything. You're not good at everything. You're not a 20 billion firm. You may not have [00:36:00] 10, 000 years of investment experience. And so just embrace who you are and roll with it.
Stacy Havener: And we give our clients this exact advice, which is like the elephant in the room question. You know, you go into a meeting and they're like, don't, let's not talk about this. It's those exact things that you actually should talk about because guess what? Everyone in the room is thinking about it. If you don't talk about it, it makes it worse.
Stacy Havener: You know Daniel Crosby. Yeah, yeah. Okay, so we're doing a little podcast mini series, speaking of collabs, where I give him, like, stuff that I see in the wild that's not rooted in any sort of PhD expertise, and then he tells me why that works, right? So that's, like, one of the things we do. And I brought this exact thing up to him and I'm going to send you the link to it after and I'll put the link to the episode in the notes, but he calls it, it's the blemishing effect.
Stacy Havener: It's actually a behavioral, like it's rooted in neuroscience that that what you did quite [00:37:00] naturally and what Eminem did quite naturally works like scientifically. So high five to us for, you know, getting there somehow, but it's a
Manish Khatta: real thing. And the funny thing is that none of it was rooted in science when we did it, right?
Manish Khatta: That's right! Once again, it was just a part of being raised in this industry where I was always taught to say something without saying something. And like, for example, let's say that we're a money manager and we have a buy signal because of X and We make a PowerPoint that says something completely different, like the job support came out or ISM and all this bullshit had nothing to do with what actually happened.
Manish Khatta: And I was spending all this time creating all this work to say something that didn't even happen. Why not just tell people what happened? And so, you know, it's this whole concept of being transparent. It's easier. It's harder to come up with marketing material. That beats around the bush and doesn't actually say anything.
Manish Khatta: It's just much [00:38:00] easier to just be totally transparent. So it's a function of what we believe. And also just the fact that we thought we could get to market faster, get content out there faster, if you just kind of did what you do, right. And that's the whole concept of just being open and transparent. And sometimes it does come back to bite me sometimes, but, but that's fine.
Stacy Havener: We'll be back in a moment after a word from our premier brand partner, Ultimis Fund Solutions.
Manish Khatta: When we first launched our internal fund to funds as a limited partnership, it was a great option for us to be able to provide a hundred of our accredited and qualified purchaser clients with access to a diversified portfolio of hedge fund strategies. However, fast forward to 2016, our firm had grown to manage over 4 billion and serve over a thousand clients of various sizes, accreditations, and tax situations.
Manish Khatta: We still firmly believe that high quality hedge fund exposure is important to client portfolios. [00:39:00] It provides stability. To client portfolios and generates a return stream that was not available in public and equity and fixed income markets. Unfortunately, the 3C1 structure with its slot limitations, high minimums and K1 reporting was no longer ideal solution for our growing.
Manish Khatta: and complex client base. We looked at various alternative options with third party hedge fund managers, liquid hedge mutual funds, but also discovered that we had an opportunity to register our fund with the SEC, preserve its extensive track record, and solve all of the issues that the 3C1 structure was creating for our business and clients.
Manish Khatta: That's when we teamed up with Ultimis to begin the process of registering our legacy fund. with the SEC and converting it to a tender offer fund.
Stacy Havener: We'll hear more later in the show. Now back to the program. So I was going to ask, [00:40:00] let's talk about compliance for a second, because my gut would say that some of the stuff that you're doing when it's very like it's not related to the fund.
Stacy Havener: You're not talking about performance. You're not even talking about what's. In, you know, where you are in the cycle or what's in the portfolio or model right now, was the compliance easier or more difficult with some of the strategies that you talked
Manish Khatta: about? It was easier before we actually did one of our first webinars in five years last week, and because we're doing a little bit of a pivot, that is so much harder to prepare for compliance wise, making sure you're not saying anything promissory.
Manish Khatta: Me and my CMO, shit talking about FinTech news. What is there to talk about? Right. And so eyes on brand, and that's the hardest thing for advisors to grasp. It's like eyes on brand is the easiest compliance marketing you're ever going to get because you're literally not saying anything about your firm.
Manish Khatta: What a hundred
Stacy Havener: percent. And then they go, I can't say [00:41:00] that compliance will never let me say it. And it's like, no, it's the opposite. The things that you're trying to say is the stuff compliance doesn't want you to say. The stuff about that we're suggesting is the stuff they don't care about. And in fact, it's more powerful.
Stacy Havener: So that's good to know. Um, the other thought I had as you were talking is that, you know, we talk a lot about qualitative. We talk a lot about qualitative due diligence. We, you know, people do business with people. Are you really, you know, buying a fund or are you hiring a human yada yada? What I'm curious about is your take on that, because everything you've described so far really puts qualitative at Potomac, like who you are as people and your culture and your values and your vibe, front and center.
Stacy Havener: And yet, once you get under the hood, what you're doing is very quantitative. So I wonder if you've, do you ever think about that juxtaposition or?
Manish Khatta: We had our conference a couple of [00:42:00] weeks ago, right? We do an annual conference for all of advisors and I did the opening and I was telling them about this story about this advisor.
Manish Khatta: He asked me about a fellow money manager and I said, you know, they're great. They do a great job for their part of the business. I'm not going to throw any shade at them. I said, you just have to feel comfortable with the word proprietary. And he said, why? I said, ask them about their process. Ask them about everything.
Manish Khatta: You know, they, they trade and what they do and do me a favor. Every time you hear the word proprietary, take a shot of tequila, a mini shot. I mean, we're adults, right? It's a Wednesday afternoon. And I didn't hear from him for a month and calls me back. And he goes, you know, I went out with my wife that night.
Manish Khatta: We had a great time. We danced, but I had to shut the call at seven. And I was like, I didn't know what he was talking about at first. I'm like, what do you mean? He goes, seven shots of tequila in the first 15 minutes of the conversation. And I decided that. That's all I heard. I, I, I, there's nothing else for me to talk about.
Manish Khatta: And so the way we approach this whole qual and quant stuff is I would actually get on the phone and I still do [00:43:00] with advisors and I show them the actual code that we use, the actual software that we use that generates the buy and sell signals. And I tell them, I said, listen, once again, I can sit here and make a PDF or a PowerPoint, but it's actually much harder for me to do that.
Manish Khatta: Why don't I just show you when we ask questions and we talk about it freely. And I do update videos once a month where I use that same code system and I say, this is the buy, this is the sell, this is why it happened, this is what we're looking at, and we're just very open and transparent to the point where there's nothing you can say at that point, right?
Manish Khatta: I've told you everything about the expectations and all that stuff. I'm a big believer in that, that, you know, I said this in a video, do you know the number one reason for divorce? No. Well, most people would probably guess what? Financial. Finances,
Stacy Havener: financial. I was gonna say money.
Manish Khatta: Yeah, the number one reason for divorce is uncommunicated expectations.
Manish Khatta: So if you come home and you know, you expect your husband or your wife to [00:44:00] make dinner for you because you had a long day at work, they don't for whatever reason, rather than communicating those expectations, you just do inside and get angry and angry and angry. And over time, what happens is you end up obviously resenting that person and possibly leaving that person, right?
Manish Khatta: I think that the advisor and client relationship is no different. If you don't communicate the expectations of this portfolio of this fund through good, through bad, through sideways, how can you get mad at them? If they don't then understand what your product is doing, right? And so we get that all the time where the advisor calls and they're like, well, you know, I don't understand what's going on.
Manish Khatta: Send them the video, send them content, show them these are the expectations. Are you okay with these expectations? If you're not, then. You probably aren't a good fit for us. And so I think that the big part is between qual and quant is number one, transparency, communicating expectations, and for us showing them the quant.
Manish Khatta: Listen, advisors are not coming to [00:45:00] you to get your street secret sauce and then go manage their own money. No, they don't have time for that. They don't have time for that. And if they are, congratulations. There's so much money out there. Knock yourself out. What's the point of hiding it? And so we're very open about it and very transparent and because it helps.
Manish Khatta: Cause if the market dips and you're invested, or if the, if you don't keep up with the market or, or if the expectations aren't aligned, we can easily point to why, how we showed you and move on.
Stacy Havener: I love what you said about communication in partnerships and relationships of any kind, because it's not just communication, what you said was of expectations, and that adds a dimension to it.
Stacy Havener: And when I think about what you just took us through there, It reminds me of, you know, when you're talking to a client, I think most managers would want to give like a target IRR or target return. Okay. So what can I expect? Well, this is what we're targeting, you [00:46:00] know, and the reality is that's not enough.
Stacy Havener: That's one part of the communication around expectations. It's more about the experience. You said something really powerful, which is, what are we going to do in up markets, down markets, sideways markets, this rate environment, that rate environment, whatever it is. So you're painting a picture that's more than.
Stacy Havener: I've done a good job if I hit that target IRR or that performance target. What you're saying is, here's what the experience could be. Not promissory, just this environment is challenging for us. This is an environment where we typically do really well. That type of conversation has so much more depth to it than just a number.
Manish Khatta: It starts with the transparency, right? Like, imagine you're a manager and I get these market commentators all the time where, you know, the war in Ukraine and Russia sent stocks lower and we decided to do whatever because of that, right? You just set the expectation that whenever there's a geopolitical event [00:47:00] that you're expected to then do something.
Manish Khatta: You're expected to act. You know, we take the opposite approach. We don't know. It has nothing to do with what we're doing. So there could be a war going on. There could not be. It doesn't matter to our process. And so Once again, the transparency of not making things up, just telling them, look, I don't know.
Manish Khatta: I'm not an expert at that. I have no idea. And so why am I going to answer your question? It's just, this is what we do and how we do it. And it can come off as flippant. It can come off as condescending. I have a way to be abrasive and I get that, but I would rather just cut to the chase and answer a question.
Manish Khatta: And I tell everyone on my staff, this like, Just answer the question, whether they like the answer or not. That's not your problem. The answer is the answer. You don't have to, uh, you know, make up things. If you made a mistake, I made a mistake. We messed up. Just answer the question. And it just alleviates a lot.
Manish Khatta: And listen, all these things can go to marketing, can go to due diligence. It's all the same concept, even [00:48:00] with your marketing, just tell them what you do. You know, if you're going to do that product piece, like you don't need to fluff it.
Stacy Havener: Yes, I have a phrase my team thinks is somewhat abrasive, which is, to nutshell, I'm like, what's, just put it in a nutshell for me, and I don't mean it to be rude, but I'm like, can we get to like, tell me, if I want more, can you just
Manish Khatta: nutshell it?
Manish Khatta: Minus shit or get off the pot. That's probably a little bit different than yours.
Stacy Havener: And then if I need more information, I'll ask you, but please don't like throw up on me all this stuff. Like what's the nutshell? The odds are, I'm going to be like good or not good or whatever, like, but we can move on. So it's actually freeing when you take that approach because it's more simple.
Stacy Havener: You don't have all this complexity.
Manish Khatta: I've never been happier as a business owner. I mean, I sleep like a baby. I don't have to worry about anything. I tell everyone exactly what we're going to do from the staff to I mean, the staff knows where we stand. We share budgets. We share financials. This is what we're doing.
Manish Khatta: This is what we're going after. It's part of that [00:49:00] Ray Dalio approach. We haven't gone that far yet. But that whole Dalio approach of being so transparent that it makes people uncomfortable and, uh. I think because I'm a big believer that your success is defined by the number of uncomfortable conversations you're willing to have, not only with clients and advisors, but also with your spouse and your kids and your staff and everything.
Manish Khatta: Oh, I love that. Yeah, you could almost to a T mark the people that are successful in this world or because they're willing to have uncomfortable conversations. Wow,
Stacy Havener: that's such a perfect segue to the last thing I wanted to talk about, which is, okay, so now here you sit over a billion in a pretty short amount of time, even though You know, it probably doesn't feel short to you, but really that growth is since 2020 is pretty phenomenal when you look back and you can look all the way back as far back as you want to look, um, at Potomac, I think you've shared what worked, what didn't work, what's the hardest thing about it that if you could kind of give [00:50:00] some people advice around, like what's the hardest thing right now or what has been the hardest
Manish Khatta: thing?
Manish Khatta: The thing that didn't work and was the hardest thing that I had to cleanse myself from how I was taught from previous people were that employees aren't investments and our expense items on the financials. And because early on in my career, at least it was employees retreated. As an expense, and if you know, you wrote them and if 1 didn't do well, you just fire them and hire someone else.
Manish Khatta: And that's fine. If you're looking for a business, that's not going to grow. But in order to grow, you have to have employees. You have to treat them all. You have to reinvest with them and you have to pay them. Well, they have to be vested in the growth as well. And I'm still struggling with that. I'm trying to figure out more ways to continue to keep them in the process and, and invest back in them.
Manish Khatta: I think that was, um, you know, the mentality that they're in the expense line item was something that, that I had to get out of my system really quickly. Yeah.
Stacy Havener: What a great way to think about it, that they're an asset versus a [00:51:00] liability.
Manish Khatta: Right. Yeah. Listen, there's a bunch of hippie dippy nonsense out there about elevating the staff and all that.
Manish Khatta: I don't go that far. But they're an important part. Listen, I can't, as much as I feel like I can do this by myself, I can't. And so, you know, you have to get people involved in the process. And so that, you know, we have a great leadership team and that's a huge part of why we're here. You
Stacy Havener: know, I love that.
Stacy Havener: And not for all the hippie dippy stuff either, but more because. You know, I talk a lot about this idea of true fans and I think in the seats that we sit in, you know, on the asset management side, everyone goes to like, Oh, that's clients. Those are the investors. If I can find my true fans. And it's true that those are your true fans.
Stacy Havener: But I've recently kind of, as I've talked more and more about it and thought more and more about it, I'm like, the first true fans are the people who show up every day at their desks at your company. And if you skip over them, Or you don't think about what that really means, you're doing yourself a disservice.
Stacy Havener: [00:52:00] So all the things we talked about today, attracting and repel, and repelling, like, all the ways that you're challenging the status quo, like, that attracts and repels teammates? Just as it, as much as it does clients, and that's a good thing, because in order for you to build what you're trying to build, they need to be like drinking the Kool Aid at Potomac, or the tequila, like it can't be, you
Manish Khatta: know, right?
Manish Khatta: And that's where the content comes in. Cause prospective employees, they know everything about us before they even come work with us. Right. And we've had prospective employees go to videos and be like, I don't like this. Like this, this video is disgusting to me. I can't believe you're talking like that.
Manish Khatta: And we're like, cool. Thanks for the feedback. You know, good luck in the future. It's just not a fit, but you know, the, the expectations are communicated right then and there with some of the content. Right. And so it's a spider web. This is all connected the way you operate, the way you pull content and the way you raise assets.
Manish Khatta: Okay, I
Stacy Havener: want to do Proust Questionnaire with you, which is [00:53:00] fun, although, you know, as I was prepping and I shared this with Manish in the green room, you are the only team and the only person I've ever seen to do anything with the Proust Questionnaire in this biz. Like, you actually had a channel or a podcast or something called the Proust Questionnaire.
Stacy Havener: I like thought of my chair. So now I feel I'm like, well, my questions are kind of lame compared to what you and Chris Norton did. But before we go to that, just real quick, if you could give You know, there's so many boutiques out there who feel probably like you felt after you bought Potomac and you're, you know, your assets are under pressure and you've got life things going on and you're fighting against the odds.
Stacy Havener: Like, what would you say to
Manish Khatta: them? The one thing that I think is important is if you believe in this business, and that's a big if some people don't necessarily believe in their own business, believe it or not, what I did at least is pay yourself enough money to keep the lights on to feed your family. And put every single dollar you have back into the business in terms of eyes [00:54:00] on brand and marketing and just focus on that.
Manish Khatta: The money management is going to be there. That's your product, right? Don't go try to sell the product, sell the brand. People skip over branding. And to me, branding is the foundation of any growth is making sure that that brand's there. And so sometimes what they'll do is they'll say. They'll get a marketing consultant and they'll do like a webinar, a seminar, you know, one lead magnet and it doesn't work.
Manish Khatta: And then they quit and that's just not how it works. You have to close your eyes, do the branding, do the content, and just assume that nothing's going to work for at least two years. In year three, then you'll start seeing traction, but most people never make it to year three. So that's why we have these podcasts.
Stacy Havener: That's right. And it's tough to measure. It's very difficult to
Manish Khatta: measure. You don't measure. So that's the other piece of advice. Just for the first couple of years, we didn't measure anything. You know, people would ask me like, well, what's your return on investment or how many leads are you getting? I was like, I [00:55:00] couldn't tell you.
Manish Khatta: And I don't care right now. It's just building the brand and putting as much content out as possible and just getting eyes on it.
Stacy Havener: Yeah. Huge leap of faith. Great advice. Okay. So I'm going to baby step into proofs, but I feel like I should maybe pick some new ones for you. Cause you've already
Manish Khatta: done this.
Manish Khatta: It's all right. Things change. We evolve. I did that. I was heavily under the influence of alcohol when I did that. So I'm pretty sober now. So let's go.
Stacy Havener: All right. Things change. Here we go. So the first question, the baby step in is about books. Now, if you don't read, some people are not like avid readers. You could do podcasts or movies here, but what book or podcast or movie?
Manish Khatta: Okay, so I don't read. I don't read at all. I don't want to be such a fanboy, but I'm still a Gary Vee fan. Uh, we don't do everything that he promotes, but I like the fact that you can listen to a podcast of his or a speech of his from five years ago or five days ago. And he's very consistent with what he's telling you.
Manish Khatta: And so I enjoy a [00:56:00] ton of his podcasts and then I'm a sports junkie, you know? So any of the football and basketball podcasts that are out there are on steady rotation, you know, I got four kids under seven, so there's a lot of kids stuff going on as well. So that's, that's, that's the second part.
Stacy Havener: It's the worst when you find yourself singing a kid's song and the kids aren't even around you.
Stacy Havener: And you're like, you know
Manish Khatta: what? Guess what? My walk up song for the Jolt presentation was a Bluey anthem.
Stacy Havener: Well, I have Walkout Anthem as one of the questions. So you can pick a different kid's song if you want. That's so great. And you know, here's the thing. Again, Old Guard in our biz was all about books.
Stacy Havener: New Guard is really more about podcasts. I mean... Like, there are so many great, inspiring podcasts, so if you're not already, I mean, I guess I'm sort of preaching to the choir, because if you're listening to this one, you're certainly listening to more. But I think there's so much inspiration and learning and education that you can get from podcasts.
Stacy Havener: You're going to have to talk to me about Gary Vee. I [00:57:00] am not a huge Gary Vee fan, and I don't know why. I have every single one of his books. I don't know what it is, so we're going to have to have a separate Combo about that with over a tequila. Okay. What place inspires you? Like, what's your happy place?
Manish Khatta: You know, I've always been a fan of Southeast Asia. I used to travel there a lot when I was younger. And, you know, just, I just love that part of the world. Street food, walking around in a crowded, organized chaos, is what I call it, those cities down there. Oh, I like that. I'm pretty much stuck here for at least 18 years.
Manish Khatta: But one day when these kids are out of my hair, that's where I want to end
Stacy Havener: up. I love it. So good. Okay. Now here's the Walkout Anthem song. You can't pick Bluey. I know. That's, that's fine. Okay. What's your
Manish Khatta: new Walkout Anthem? It was Tupac, All Eyes On Me, but I couldn't probably play that at a financial conference.
Manish Khatta: And so we went with Bluey, but That's a good one. Yeah. I'm, listen, I'm 1980 born, like we're that 90s and 2000s hip hop era. [00:58:00] So I'll be 80 still playing that stuff.
Stacy Havener: Okay, what profession, other than your own, would you like to
Manish Khatta: attempt? I want to be a general manager of a sports team, if that's ever possible.
Manish Khatta: Particularly the Wizards. I'm more of a basketball fan than anything. That would be, or the Redskins. That would be a dream come true to be a GM of any of those teams. But, obviously, that's not going to happen.
Stacy Havener: Okay. Putting it out into the universe. I like
Manish Khatta: it. So, funny story. I have tried. Multiple times to I've sent letters and emails to the Washington Wizards about developing a quant system on the players like I have attempted this that they haven't responded, but one day they will yet
Stacy Havener: they're not into it yet yet yet is the operative word there.
Stacy Havener: Okay, what profession would you not like to do
Manish Khatta: financial advisor to retail clients?
Manish Khatta: Look, I tell advisors all the time, but advisors tell me, Oh my God, how do you know you manage all this money and your tactical? How do you do what you do? It's so impressive. I'm like, no, sir or ma'am, what you do [00:59:00] is impressive because I don't have the temperament for a 70 year old that's asking me what a mutual fund is, or they have a special skill to manage the emotions of retail clients.
Manish Khatta: And I do not want to do that. You'd be a horrible, horrible. I know that. I knew that from the start. So.
Stacy Havener: Yeah. So that's perfect. What a great answer. That's amazing. Okay. And the last one on a little bit of a more serious note, what do you want people to say about you after you've retired or left the industry?
Manish Khatta: I'm going to answer this with a little bit of roundabout way, but I think it proves the point. There was a Simon Sinek, I think, uh, was his name. He did a presentation on the seals and they said that, you know, performance and trustworthiness were the two, the X and Y axis. And ultimately they would rather have someone be a seal who maybe is a lower performer, but higher on the trustworthy scale.
Manish Khatta: And so the roundabout way of answering that is when I go, I just want people to realize that no matter what the [01:00:00] question is, that I would answer it. And be as truthful as possible without being disingenuous. And I think that's prevalent in our industry, especially with, uh, large RAs and FinTech and, and consolidation and stuff like that.
Manish Khatta: So, yeah, I just want people, that would be my one wish is to say, look, no matter if it hurt my feelings or not, you know, it was the truth and that's it.
Stacy Havener: I love that. And I think they'd probably say that about you now. I don't think you need to wait until you retire or leave the industry. That's already being said, my friend.
Stacy Havener: And you know what I love about that? Two things in particular. One is that the growth curve of the investor, you know, the sort of there's like the adoption curve and investors plot along that curve and different things are important to them at different times. So as you grow as a, as a As a business, your target market changes, and that's what you're recognizing, that in order to lean into the new target market, which is more about platforms, perhaps, and sort of bigger, more corporate entity, that you need to [01:01:00] somehow find a marriage between the What has defined you, what makes you unique, what's authentic to you, and kind of this new vibe that you need to embrace as well.
Stacy Havener: So to me, it's like, it's a pivot, but you don't go back to the old guard, you just do what you described with the postcard. It's like, we're gonna do those things and show up a certain way, and how do we do that without losing who we are?
Manish Khatta: Correct. Yeah. It's an adjustment or retooling a little bit. The content is there.
Manish Khatta: We're staying true to ourselves, but look, the truth is like, if you're going after a billion dollar institutional platform, the eyes on brand stuff probably needs to be, uh, tailored a little differently. Right. And so we recognize that it's through different cycles.
Stacy Havener: Okay, so let's go back to the pivot. So what's this cool pivot you're working on?
Manish Khatta: So to us, the eyes on brand was put out there, right? We went from 50 advisors across the country to about 800. And so the massive growth was there and it was taking a lot of my time. I was taking a lot of my [01:02:00] CMOs time and we just said, Hey, you know what? Let's pivot back now to your more traditional conferences, PDFs, webinars, the old school stuff, because now that the eyes are on the brand, we're now pivoting to becoming more corporate.
Manish Khatta: And in that world to raise assets, you have to be a preferred partner. You have to show up at conferences. You have to do that side of it, right? So at our conference recently, for example, I told everyone, listen, guys, it's time for. Suits, not ties, but suits and business wear instead of, you know, the hoodies that we were wearing for years, because we are, we have to take that pivot now as you grow to a different world.
Manish Khatta: And so we might, we're going to come back to content, but we're going to do it a little differently. But for now we're doing this small pivot to a lot of old school marketing. We sent out a postcard the other day, a postcard, the front of the postcard said, is your mailbox not getting any action? That's it.
Manish Khatta: And the back of it was a QR code that went to a link to our site, to our strategies and the whole thought [01:03:00] was right. I mean, everyone, it's all digital, but where's your mailbox. So we're going back and trying some of these things that worked, uh, in the past. And. Once again, it's about attention, right? And it's a, where can you get the most attention for your product?
Manish Khatta: And that's kind of the plan right now.
Stacy Havener: If you know a fund manager or a founder in the investment world with a great story, drop a note to Stacy at Stacy Havener. com and tell me about it till next time. I'm Stacy Havener. Thanks for listening. And now a final word from our premier brand partner. Ultimis McBurgh's
Manish Khatta: LP into an integral fund, empowered them to grow the fund from 90 million to over 200 million and expand the reach from 100 investors to nearly 700 new investors and continues to grow today by pursuing the conversion, a homer Berg was able to lower minimums to 25, 000 welcome accredited investors.
Manish Khatta: In [01:04:00] addition to qualified purchasers, the entire conversion process was highly efficient. Because Homer Berg chose to partner with Ultimis and other partners with a proven track record in this type of structure to structure product transition. The headlines are often too focused on new interval funds from pedigreed providers, this new fund from this cool big firm, et cetera.
Manish Khatta: Maximizing a fund's potential through a conversion can be a powerful too. As we see in the story of Homer Berg traditional investment management and alternative investment management are converging more retail investors are demanding access to non correlated strategies in a liquid asset classes to compliment or supplement public markets exposure interval and tender offer funds offer managers a flexible wrapper.
Manish Khatta: That combines many of the benefits of both 1940 Act and private fund structures. Interest in these products has increased significantly in the past decade, and we anticipate the volume of both new launches and structure conversions to continue well into the future.[01:05:00]
Stacy Havener: This
Manish Khatta: podcast is for informational
Stacy Havener: purposes only and should not be relied upon as a basis for investment decisions. The information is not an offer, solicitation, or recommendation of any of the funds, services, or products, or to adopt any investment strategy. Investment values may fluctuate and past performance is not a guide to future performance.
Stacy Havener: All opinions expressed
Manish Khatta: by guests on the show are solely their own opinion and do not necessarily reflect those at
Stacy Havener: their firm. Manager's appearance on the show does not constitute an endorsement by Stacey Havener or
Manish Khatta: Havener Capital Partners.
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