Hedge fund branding is increasing in significance as SEC lifts its ban on advertising private funds and institutional investors demand secretive firms to open up and explain what they do.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 has ended the ban on advertising private funds to the general public. As a result, it has provided reassurance to hedge fund managers that creating a strong brand for their companies is not only permissible,but highly necessary. Since recently, very few hedge fund firms have intentionally developed a marketing and branding plan that is targeted to existing clients, prospective clients, and even the general population.
Branding Newbies
Those who are newbies to hedge fund branding can start by improving their Internet presence through more user-friendly, attractive, and modern-looking websites. They can also slowly ease their way into social media such as Facebook and Twitter to present a more approachable face to potential investors. Another simple step to start branding would be to produce hedge fund marketing materials such as informational brochures that can explain their hedge fund company and their investment strategy in a nutshell.
Open Communication
It used to be that hedge fund managers were so secretive and aloof, that they would even hesitate to open up to their existing clients. As institutions have become the major source of capital investment in the past few years, hedge fund managers are being pressured to communicate more regularly and openly to their clients.
Hiring for Marketing
Hedge funds never used to worry about recruitment as they could easily afford the best talent for specific tasks. However, as hedge fund marketing comes to the industry’s forefront, most hedge funds now require communication specialists and client relation experts. Another move is to start partnerships with hedge fund marketing solutions providers that can offer customized products and services targeted to specific investor channels.
Branding Pays Off
Marketing moves should target institutional investors who can make significant capital investments in the long-term. Blue Mountain Capital Management, New York, has been implementing its branding strategy over the past few years and so far, it has resulted to $13.1 billion in institutional investments.
Branding Will Make or Break Your Company
Hedge fund branding starts with a vision of what your company stands for. It should convey what you offer to investors, employees, and the industry. Institutional investors are conservative and they expect performance but also consistent communication, and professionalism. The latter two cannot be achieved without effective hedge fund branding.
