5 Unique Hedge Fund Marketing Tactics (2 of 5)
This is part 2 of 5 within a series on unique hedge fund marketing tactics that managers should investigate further while working to raise capital for their funds. Before taking any of these actions please consult with your compliance and legal counsel for confirmation that you are able to use these methods to market your specific fund.
Educational Marketing - One of the most effective ways you can market your hedge fund is by being 4x more educational and easy to understand than your competition. I wrote here in my blog last year that a recent survey showed that over 78% of institutional investors will not invest in something which they cannot understand, I would imagine that for HNW investors this figure is even higher.
While some managers purposely position their fund to appear "black box" and top secret you could market your fund as being more open, transparent and simple in how you approach explaining your investment process. This does not meant that you ignore advanced methods or models of trading and managing portfolios, but it would require more of a 10,000 foot view and explanation of your investment process instead of the 500 foot views that I often see. The trick in doing this right is balancing providing enough detail and real meat that an institutional investor or consultant will gain some granularity while you don't completely overwhelming HNW investors or wealth managers who may be less versed in common hedge fund strategies of portfolio management techniques.
Here is a list of 4 additional ways you may market your hedge fund in a more educational or simple way:
- PowerPoint - Dedicate 20% of your PowerPoint presentation to educational content. Asterisk all industry terms and note that definitions are provided within the back of the presentation. Explain your investment process so that anyone could understand, at least on a high level how your fund operates. Start with your team, high level investment process and how that all comes together before digging into trading examples or risk management tools.
- Folder - Many managers use a folder of marketing materials while meeting with clients. This often includes a one pager, PowerPoint presentation, and a recent quarterly market outlook newsletter written by the PM. It is wise to always include some additional reading within the folder as well. Provide 2-3 white papers written by experts outside of your firm that speak to the trends related to the assets your firm invests in or strategy your firm employs.
- Speaking & Writing - This also came up within the last post in this series on public relations but I would highly recommend writing and speaking every week to help build a presence, brand and network within the industry. Speaking at wealth management conferences and HNW related events can be highly effective.
- Wealth Management & Financial Planners - One of the most ignored sources of capital for hedge fund managers are small to medium sized wealth management firms and financial planning groups that serve HNW professionals from time to time but don't manage $1B+ in total assets. Many of these groups work as part of a broker-dealer network or RIA and they may only meet in person with 5-10 hedge funds in any on year vs. larger institutions which may meet with several each week. These relationships take a long time to build into effective sources of capital but I have found that if you approach them in a more educational fashion than your institutional leads they can pay off as very sticky long-term accounts.
Also check out our Hedge Fund Marketing & Sales Guide.