Hedge Fund Investment Adviser

Hedge Funds & Investment Advisers

While hedge funds are showing weak capital raising numbers in 2008 a recent survey came out showing that over 95.7% of investment advisers believe that hedge funds don't understand their business needs. The same survey showed that over 88.7% of these same advisers thought that sales efforts on behalf of hedge funds are ineffective.

This is great news for those within the hedge fund and third party marketing industries. There is much room for improvement and if you do understand the business needs of financial advisers it would seem that you would have a clear competitive advantage over your competitors.

Here is some more from this article:
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Nearly 64% of the hedge fund investors described a financial adviser as a "very" or "extremely" important source for making their selection. Other key sources of information investors use in making hedge fund decisions were their own networking or research activities (48.8%); an investment management consultant (21.5%); an accountant (19.4%) and seminars and conferences (17.5%).

"The primary reasons, according to the report, are "inexperienced third-party marketers, sales professionals and wholesalers, one-size-fits-all presentations and aggressive sales tactics and product positioning that leave little room for productive dialogue or interaction."

Hedge funds need to do their homework and customize their approach to advisers and wealth managers, said Russ Alan Prince, co-author of the report with Hannah Shaw Grove and president of Prince & Associates. Ms. Grove is principal of HSGrove Private Wealth Consultancy in Edison, N.J., and an equity partner of Prince & Associates.

"Hedge funds aren't making the effort they should," said Howard Altman, co-managing principal of Roseland, N.J.-based Rothstein Kass, an accounting and consulting firm that specializes in hedge funds and sponsored the report.

But advisers need to do more as well, Mr. Prince said.

"Advisers don't understand hedge funds, either," he said. "They have to find a hedge fund with which they can develop a professional rapport and bring to the table for those clients for whom it makes sense.

"Advisers also need to find funds that can offer the right solutions for their clients' needs," Mr. Prince said. "Often these are esoteric solutions that advisers are not comfortable with themselves, such as currency or commodity issues, or shorting stocks."

- Richard

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