courtesy of HedgeCo.net –
Since the market correction of 2008, a vast majority of hedge fund net asset flows have gone to a small minority of hedge funds with the strongest brands, marking a change from the pre-2008 environment. A brand is an investor’s perception of the overall quality of a hedge fund based on multiple evaluation factors that evolve over time. A high-quality brand takes a long time to develop, but once achieved, it significantly enhances a firm’s ability to raise capital and retain assets during a drawdown in performance.
Branding is a critical issue for all hedge funds, because the marketplace has become increasingly competitive. Most agree that there are over 10,000 hedge funds in the market place. Hedge fund investors are inundated with requests for meetings, with some receiving hundreds of phone calls or e-mails per week from investment managers. To filter through the overload of information, investors are turning more and more to a firm’s brand when choosing which funds to meet and ultimately invest with.
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