Institutional Investors Drive Hedge Fund Branding

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.

Building Reputation through Proper Corporate Branding

When you think of branding, the first thing that usually comes to mind is a farmer putting hot iron against the skin of a cow to mark that cow as his own and not any other farmer’s. That brand that the farmer has given the cow identifies that cow as his. It is virtually the same concept with corporate branding and marketing in the business setting. The brand of your company marks your services as your own. Your brand identifies you in the industry. Your brand is your identity and it is what separates you from the rest of the companies in the competitive industry. A well built brand erases all traces of the other companies in the industries and in the eyes of the general public, only your company reigns supreme.

Think of all the successful brands in the business. When you see the tagline ‘I’m lovin’ it’, you can automatically associate it with McDonalds and everything it offers. From a single line or a simple logo, your company is recognized and defined in the industry. It’s your goal to create a brand that will be easily recognizable in the industry. Proper corporate branding design could make or break your ranking in the industry so it is very important that you take this matter seriously, for the sake of your company.

When you present your brand to the general public, it’s a general dilemma on how to make sure it sticks into their minds. When they see your image, your logo, your tagline – they should be able to connect it with your company. You want your brand to stand out against the competition in order for your reputation as a company to spread out. You need to figure out what your clients want and need and how to tell them that you’re the company for the job.

Your brand also needs to be relevant to the industry where your company belongs in. You’re not going to base a design for your company on rainbows and muted pinks when you’re trying to appeal to an audience that consists of men. You need to fully understand what your company does, what your company is capable of doing and where your company wants to go. That is what the brand defines and identifies in the business and with that, your company can be recalled by your potential clients. Just as much as your brand must appeal for your company, it has to connect with your company too.