The Power of Branding

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UBS Prime Brokerage Conference April 24, 2015 The Power of Branding Michael Dunn CHAIRMAN & CEO

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Why am I here?

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When I say BRANDING and HEDGE FUND in the same sentence, what are your first impressions? Poll:

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Brand is the sum of all information about a product, service, or company that is conveyed through communications and experience… …creating an associative and emotional relationship between that entity and its stakeholders

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Brand is not advertising Logo Advertising Brand Sponsorships Public Relations Marketing Naming Product

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Brand is the cohesive story of the smart decisions you make to maximize value for stakeholders Strategy Track record Brand Vision Philosophy Personality Values Reputation + + + + + +

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Brand is rational and emotional “Brand can drive future sales growth, pricing power and profit margins - strong brand translates into solid future EPS growth “I’ve always just been a Nike person” “Brand is an intangible asset, but it does have value and can be measured even though it’s not on the balance sheet” “I would rather feel bad in Maine then good anywhere else in the world” “Wherever you go, there are three icons that everyone knows: Jesus Christ, Pele and Coca-Cola” “Companies that have a brand, and are able to monetize that brand, are tremendously profitable” RATIONAL EMOTIONAL

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Having a brand matters to your firm because you need to be trusted It is hard to sell trust directly; your brand can be that container to build the components of trust

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Trust /tr?st/ Noun Firm belief in the capability, reliability, and truth in someone or something Synonyms: confidence, belief, faith, certainty, assurance, conviction, credence, reliance

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Brand as a demand driver

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How can a strong BRAND HELP your business? Poll:

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Strong brands generate greater demand Share Price ? share ? $ Unbranded curve Branded curve In 2011, 35% of U.S. consumers polled said they would pre-order the iPhone 5… sight and price unseen BRAND EQUITY MODEL OUTCOME

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Funds at any stage, are chasing demand so they can execute their strategy Growing Proven Established Size (AUM) < $500M Strategic priority: Sourcing investors FUND STAGE Size (AUM) $500M - $1B Strategic priority: Closing funds to new investors DEMAND TRUST Size (AUM) > $1B Strategic priority: Seeding additional funds

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Brand is the conduit between trust and demand for funds at any stage Growing Proven Established Size (AUM) < $500M Strategic priority: Sourcing investors FUND STAGE Size (AUM) $500M - $1B Strategic priority: Closing funds to new investors DEMAND TRUST Size (AUM) > $1B Strategic priority: Seeding additional funds

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Brands tell a compelling story about a fund’s capabilities, reliability, and truth Proving track record of success Reaffirming reliability Expanding influence through thought leadership Communicating truth Establishing credibility through pedigree and unique philosophy Defining capabilities STRATEGIC PRIORITY ROLE OF THE BRAND DEMAND DRIVING OUTCOME Closing funds to new investors Seeding additional funds Sourcing investors

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BECOMING THE UNCARRIER... …unlocking demand to drive $1BN in revenue

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Building a strong brand

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What company has the STRONGEST brand? Poll:

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We believe strong brands are relentlessly relevant…

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Customer Obsessed Pervasive Innovation Ruthlessly Pragmatic Distinctively Inspired …and depend on four primary objectives

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First, having the discipline to stay customer obsessed like none other in their category. This doesn’t mean simply conducting research. It means tirelessly working to creatively uncover breakthrough insights that give rise to fresh, new ideas for how, where, and when to engage and win with customers. Customer Obsessed

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hgal Second, continually practicing pervasive innovation. This is a philosophy of being nimble and responsive in creating opportunities for authentic engagement, and of delighting customers at every turn. Whether it is with new offerings, content, channels, experiences, or business models, brands that constantly give customers fresh, novel, better ways to interact and engage will win. Pervasive Innovation

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Third, being ruthlessly pragmatic in how the brand can support the business strategy, and how it is brought to life in practice. This requires clear alignment around the brand’s role in driving business growth and a practical approach to ensure new proof points to activate the brand positioning. Ruthlessly Pragmatic

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But all this has to be built on the brand being distinctively inspired in its promise and ambition. The brand has to be supported and pushed by employees’ energy and talent – they need to feel that they own it. Distinctively Inspired

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MAKING ROOM ON THE STRIP... …in a saturated market with a difficult operating environment

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Brand as a strategic tool

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What is the biggest CHALLENGE you face? Poll:

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Brand can be the tool that unlocks the opportunity that lies in the tensions you face Transparency vs. Mystery Differentiated vs. Dependable Human vs. Machine

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Human vs. Machine The challenge: Defining the right balance of relationship-anchored expertise and technicals to appeal to your target investor

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Transparency vs. Mystery The challenge: Telling the right story

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Differentiated vs. Dependable The challenge: Defining your white-space without introducing outsized risk

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Thank You Michael Dunn Chairman & CEO mdunn@prophet.com prophet.com