Hedge Fund Advertising Strategies Uplifted by SEC

We told you so..(8 months ago!)..
In connection with last year's passing of the JOBS Act, today the SEC is expected to officially approve a new rule that would ease 80 years of advertising restrictions on ways that hedge funds and other companies seeking to raise money through private offerings.
 


The rule would ease 80 years of advertising restrictions that help ensure small investors aren’t lured into taking inappropriate risks. Under the new rule, startups and other small companies would also be able to use advertising to raise unlimited amounts of money.

“It changes the whole paradigm of who you can talk to,” said Brian J. Lane, a former division director at the SEC and now a partner at Gibson, Dunn & Crutcher LLP in Washington. “Hedge funds will benefit because they have the most restrictions on their ability to communicate more broadly about different funds coming to market.”

The rule affects how companies raise money through private offerings, which are exempt from requirements to publicly report financial statements. Private offers are restricted to wealthy investors, who are considered better positioned to understand the risks of investing with less information.

For the full story from Bloomberg LP, please click here

The Dark Art of #HedgeFund Marketing: Shine Light on What You Do..Duh!

Courtesy of Bruce Frumerman



Editor Note: Marketing and Communication techniques for hedge funds are often no different than the techniques other service-centric businesses need to focus on. Its all about differentiating yourself from competitors and developing messages that distinguish yourself and ones that are clear, crisp and easy-to-grasp. We don't often profile 'competitors' in our posts, but we're happy to make an exception in the case of this simple, but important tutorial for masters of the universe who often believe what they are saying makes sense...even if their audience remains confused.

Have you taken notice of what SEI reports in 6 Ways Hedge Funds Need To Adapt Now, which addresses what it takes to succeed in the hedge fund business today? This sixth annual global survey of institutional hedge fund investors, with insights from roundtables with industry experts, reports that the key challenges hedge fund firm owners face today include the need to be able to demonstrate a sustainable edge and a clear value added, and to have business and marketing acumen.

SEI notes that seven out of ten institutional investors responding to its survey complained that “there are too many look-alike strategies in the hedge fund industry today.” Investors are not just looking for absolute returns, but for “differentiated alpha sources” that can produce non-correlated returns.
But, it is not enough for hedge funds to distinguish themselves in terms of their pedigree, talent, strategies, and performance, SEI observes. They need to “clearly articulate their investment process, and explain what makes their results repeatable (not to mention worth the fees they are asking).”

At too many hedge fund firms the owners never put the full detail of their hedge funds’ investment process stories in print. Verbal elaboration at an initial sales meeting to explain what your flip chart bullet points were meant to convey is not going to be remembered four or fourteen months down the road when a family office, institutional investor or wealth management firm may be getting around to discussing your fund and a few others with similar performance and risk characteristics. This often results in coming across as a commodity-like investment choice rather than a differentiated hedge fund with a value-added portfolio management approach.

Hedge fund marketing materials should make it easy for investors to conduct their due diligence. Too often they do not. While the pitchbook is the right tool for communicating data-based information (charts, graphs and numbers) it is the wrong leave-behind marketing tool for delivering a compelling and detailed explanation of investment process, which is text based content. An additional marketing collateral sales tool is required

For the entire article (which links to Frumerman's firm), please click here to FinAlternatives

Mad Men and Hedge Fund Marketing: Let The Games Begin

Courtesy of Huffington Post column re Hedge Funds Can Now Engage Mad Men: 
Mad Men, the wildly popular AMC TV show about the fictional 1960s advertising agency Sterling Cooper Draper Pryce, is set in a haze of cigarette smoke, alcohol and chronically inappropriate behavior. Hedge funds, dating back to a similar era, have remained equally hazy to most Americans, as well as often being equally off-center in their behavior.

Today, as a result of the JOBS Act (Jump-Start Our Business Start-ups), hedge funds are now allowed to advertise their products through the mass market. And, to further confuse consumers, hedge funds come in all flavors, all shapes and sizes. Speaking of them as a single asset class is akin to going to the zoo and telling the zookeeper, "I'm here to see the animal."

We love creative marketing..and for you hedgies looking to hedge with a boutique outfit that walks, talks and knows Wall Street inside and out, here's a short selection of OUR recent favorite ads