PR for Hedge Funds

PR for Hedge Funds

Video Below: How to Use Public Relations Services for Hedge Fund Managers

Within this video we briefly cover how hedge fund managers often ignore, but could be employing public relations strategies to help grow their hedge fund business. If you are viewing this article via RSS or email please click here to watch the embedded video below on our website.

Tags: Hedge fund PR, PR tactics for hedge fund managers, free press exposure for hedge funds, alternative investment public relations, PR for investment fund managers

Top 4 Hedge Fund Trends

Below is a short video discussing what I see as the top 4 trends affecting the hedge fund industry.  If you are viewing this message via email or rss please click here to watch the embedded video on our site now.

Tags: Trends affecting hedge fund managers, alternative investment trends, CTA fund trends, hedge fund trends, hedge funds trends

18 Lessons from Shooting Star Hedge Funds

Fast growing hedge funds are unlike most large hedge funds and emerging hedge fund managers. They have figured something out and are positioned to grow unlike 90%+ of the industry.  Here are some lessons which can be taken away from some of the fast growing hedge funds we have worked with:

1. They take transparency serious and work to be pro-actively very transparent - more so than their competition.
2. They approach multiple investment channels but mostly ignore those completely out of their reach (example, potential pension fund clients for a $75M fund).
3. They are always developing relationships and they have dedicated internal and some external professionals always selling on their behalf.
4. They not only pedigree on their team but they are always building that pedigree through additional research, hiring of expert staff, and through speaking & writing.
5. They document their operations and make decisions based on what is best long-term for the organization rather than what is cheaper to implement today.
6. They have risk management and trading plans which are closely followed, this helps them improve their actual trading results and provides confidence to investors since their historical trading actually matches up against the decision making rules of their plans.
7. They know that "risk management" while sounding less sexy than "hedge funds" is the business they are in, and they invest in their own business accordingly.
8. They have documented, tested, and third party verified financial controls, compliance processes and audits completed at least quarterly and these reports are sent to at least board members if not investors
9. They invest and improve their infrastructure every year even if the pay-off for doing so could be 5-7 years away, ironically these are sometimes the investments which pay off the soonest though because investors recognize the type of long-term investments being made
10. They are experts at completing due diligence processes with institutional consultants, family offices and other types of institutional investors.  They have professionals who are trained for phone-based pitches and sales and hand-offs during these processes are seamless.
11. They have just as good of marketing materials as the $1B hedge funds because after investing $300,000+ in infrastructure, talent, research, and risk management it would be a waste not to spend $20,000 on presenting it in the right light in a professional manner.
12. They have seen the light that investing in the right areas does produce returns so they re-invest their money even faster and often more efficiently than even small hedge funds on a tight budget
13. They invest in training for their employees and board members who they grow more long-term relationships with than many emerging hedge fund managers might.
14. They are not only aware of the competition but they are watching them.  Not in terms of what they are investing in so much as what risk management tools, software, trading tools, and USPs they are employing.
15. While hiring they look for very specific skill sets and a minimum of 7 years of experience in the industry, unless they have a policy of grooming from the ground up.  Most fast growing hedge funds we know though like to hire professionals who can hit the ground running and quickly integrate as part of the team.  They actually have an HR department or at least one person who is head of talent development and HR related activities, something almost all small hedge funds lack.  When they are asked on the phone by institutional consultants if they plan on adding anyone they have a sophisticated intelligent answer instead of the generic, "we may add an analyst within the next 3 quarters."  
16. They understand the "trust by verify" mindset of investors and they make it easy to verify everything.
17. They conduct more due diligence on business partners, investors, and potential employees than some retail investors spend on investing in small emerging manager hedge funds.
18. They realize their success is never going to be built on one software program, capital raising process, or investment trend so they constantly are working to build their 1,000 blocks of competitive advantage and ability.

Tags: how to quickly grow a hedge fund, what fast growing hedge funds are doing, hedge fund management best practices, best practices of hedge fund managers, hedge funds

Best Practices of Large Hedge Funds

Below is a bullet point list of some best practices that I have seen $1B+ hedge funds employing that are more often than not missing within small teams of hedge fund professionals.


Giant well run hedge funds often have:

1. Better research processes in place and these are constantly being improved in many ways every quarter. They focus on Kazien - constant improvement
2. Documentation, their compliance processes, operational procedures,compliance checks, internal controls, hiring processes, and risk management techniques are all documented in great detail to help ensure consistent quality and improve what is being carried out
3. International marketing and sales teams which cover institutional investors and consultants in at least Europe and the United States if not also in Australia, South Africa, South America and Asia
4. Deep Pedigree, with larger pocketbooks the largest of hedge funds are able to retain the most experienced experts not only as adjunct advisors to the fund but full time employees or consultants which provide daily or weekly insights on upcoming investment opportunities
5. Human Resources strategies, many small hedge funds do not have any long-term talent development, or  Star Employee hiring practices in place.  Larger hedge funds do and must to keep their organization moving forward and growing over the long-term
6. Master DDQs, every large hedge fund I know of has a very thorough master due diligence questionnaire that is constantly updated.  The larger the hedge fund the more likely it is that their investors will be asking for a very thorough DDQ during the due diligence phase.
7. Superior Marketing, larger hedge funds have moved to the top of the learning curve when it comes to figuring out how to raise capital.  They use multi-modality marketing channels and materials and they have relationship development processes and goals in place which match up with the long-term growth growth goals of the fund.  They are also more than willing to invest in the best graphic designers and sales copy writers who can provide another edge over those who skimp on their image and marketing presence. 
8. More In-House Functions, while large hedge funds still use service providers and rely upon business partners many of them have large enough staffs and unique enough processes that some work such as some investment research, operations, accounting, or marketing may be done in-house instead of being outsourced to service providers such as administrators or third party marketers.
9. More Verification Points, the largest of hedge funds have been asked 500 times for their holdings, and 3,000 times for their PowerPoint presentation. They have completed hundreds of due diligence processes and are use to working with consultants who need to check every fact, assertion and claim.  They are use to operating within the world of providing evidence for everything said, and because of this may quickly meet the requests of investors who ask for such evidence.
10. Long-Term Strategies & Goals, most large hedge funds I know of plan for the next 3-5 or 5-7 years strategically in who they hire, market their fund to, and where they open offices.  In contrast most smaller hedge funds are very focused on day-to-day or month-to-month operations and most think in terms of 1-3 year plans.  When investors see the fund planning for, investing in the long haul it shows and that is part of why some larger hedge funds receive more allocations than small ones - they have the infrastructure and mindset more in common with an institutional investor.

Tags: large hedge funds, best practices of larger hedge fund managers, what do large hedge fund managers do differently, why do investors put money into large hedge funds, how large hedge funds grow their AUM

Fund of Funds Survey

Survey of Emerging Manager-Focused Fund of Funds

A recent survey of eleven emerging manager-focused fund of funds revealed that managers are bullish on emerging and early stage funds and that respondents are willing to look at smaller funds with less than $50 million under management.  Also good news for  managers is that all of the respondents said they would consider both veteran and new managers.  Here are the main findings of HFN's survey:

• 54% of the respondents would consider products with less than 1 year track record
• 100% of the respondents would look at products with less than 50 mm
• 100% of respondents are looking for funds recently formed by veteran management teams as well as "up and coming" manager talent 

Click to enlarge image below

Watch this video on fund of funds

Tags: fund of funds, fund of funds emerging market, emerging manager-focused fund of funds, fund of funds investors, fof, managers, survey of funds, fund of hedge funds

Hedge Funds: The Importance of Investment Research vs. Investment Process

Investment Research vs. Process

Below is a short video which explains the importance of investment research vs. your overall investment process. The video also goes into how often a hedge fund investment research process should be adjusted compared to changing an investment process.  Many hedge fund managers step on their on toes by changing their own investment process too drastically - this video helps explain how your firm can be innovative and constantly improving without changing your whole outlook or investment process along the way.

Tags: hedge fund investment process, investment processes of hedge funds, hedge fund investment research, research on investments by hedge fund managers, marketing a hedge fund manager

Top 10 Fund Marketing Mistakes

Our team provides over 1,600 funds a year with capital raising advice, resources and products. Our team has also helped raise hundreds of millions of dollars in capital as well. Through these two sources of experience we see many of the same fund marketing mistakes made over and over again.

If you can avoid these mistakes you will be more effective than 80% of your competitors in the marketplace.

Top 10 Fund Marketing Mistakes:

1. Mistake #1:  You have a 3 month capital raising goal.  This is un-realistic and the wrong mindset to go out of the gates with. You need to plan, build relationships, educate potential clients, and design high quality marketing strategies and materials for the long term. It takes time to raise lots of capital and usually the more valuable the investor, the longer the sales cycle. Don't try to cram everything into a 1-3 month capital raise.
2. Mistake #2:  Counting on simply building a track record and then hoping to outsource all marketing to a great third party marketing firm down the road.  This puts all of your eggs into the third party marketing basket. Third party marketers have hundreds of potential clients approach them each year, it is risky to assume one will not only take you on as a client but actually raise a sustainable level of capital for you.
3. Mistake #3: Spending $8,000 on graphic design and website design but $0 on hiring someone who is an expert at sales letter construction, writing copy, and creating headlines and taglines for your positioning in the marketplace that will be effective.  Many times I see fund managers that want to look very professional but there is no meat in what they are saying, or hook to draw in the reader.
4. Mistake #4:  Not dedicating resources to capital raising is the most obvious mistake that I see in the industry. Many fund managers will act as the CIO, make 2-3 phone calls a week or sometimes per month and then wonder why they have not raised more capital.  Performance does NOT market itself, pedigree does NOT swing all doors wide open.  You need to have dedicated resources, an internal marketing resource working at least 20 hours/week, investor databases so you can spend your time calling on real prospects instead of always having to qualify them, and have a growing internal CRM or IRM system in place to track this investment in investor relationships.  
5. Mistake #5:  Speaking at conferences full of your closest competitors instead of your highest value potential investors.
6. Mistake #6: Under-estimating the value of a first name basis relationship with your top investor prospects.  Some professionals, especially those with technical backgrounds think that marketing is a numbers game. Yes, you have to sometimes reach out to many to develop relationships with few but relationships is at the core of everything that gets done.  Like Gitomer says, "all things equal people like to do business with friends, all things being unequal people still like to do business with friends."
7. Mistake #7: Another capital raising mistake I see in the fund management space is a lack of capital raising training or fund marketing instruction.  You do not have to pay to have your marketing staff trained but at the very least you should document your own best practices, processes, investor pipeline development plans so they can be easily communicated to team members, board members and then constantly improved each quarter.  
8. Mistake #8:  Missing the boat on authority positioning, educational forms of marketing, and improving their own pedigree standing within the industry.
9. Mistake #9: Writing off PR: Most managers shy away from or completely ignore public relations as an avenue for helping create interest and positioning for experts on their team.  Many funds have now successfully employed the media to spread messages about their fund.
10. Mistake #10:  A mistake that I see 90%+ funds doing today is using a boring, run of the milll Unique Selling Proposition (USP), or worse yet, not having one at all.

Tags: Top 10 Fund Marketing Mistakes, Top 10 fund marketing mistakes, how do I market my investment fund, fund marketing services, fund marketing consultant, third party marketing consulting advice

Additional Industry Websites

• HedgeFundBlogger.com
• HedgeFundStartupGuru.com
• StockMarketsReview.com
• Investment Certification
• ThirdPartyMarketing.com
• Hedge Fund Training
• Hedge Fund Designation
• Private Equity
• Commodities & Futures Guide
• Fund Administration
• Business Career
• Prime Brokerage
• Private Equity Certification
• Online Business Training
• Investment Training