The hedge fund industry lags far behind all other financial and professional services when it comes to marketing sophistication and external communication. Research from Peppercom highlights that a high majority of funds still fail to use their website for any marketing value and consist of little more than a logo and basic contact information.
Associated benefits from addressing regulatory concerns and determining communication strategies present an opportunity for funds to build more intimate relationships with their investors. Market transparency therefore becomes a mechanism to establish an ongoing foundation of trust with both existing and potential investors.
The following three steps introduce a framework to execute a risk-averse communication strategy:
1. Build your brand strategy first. Being able to articulate your firm's value proposition will formulate a central role in any subsequent marketing endeavors. This will clearly demonstrate what your firm seeks to achieve for your investors, why you are qualified to do so, and ultimately why investors should select and trust you.
2. Create a bona fide website, not a proxy. Authenticity is at the heart of modern communications. With this in mind, investors are demanding transparency, and your website offers a channel to differentiate your firm through showcasing human capital, and providing regular examples of in-house expertise.
3. Leverage your firm's intellectual capital. A hedge fund’s intellectual capital represents its most powerful market differentiator. Whilst this does not involve giving away any proprietary information, enables you to communicate openly with investors which is publicly supported by the regulatory bodies.
Ideally, your website should express institutional values, explain processes, showcase human capital, provide examples of thought leadership and include inherent 3rd party endorsements. It’s not a sales pitch or report card. Your website will generate investor interest by allowing visitors to draw their own conclusions about the firm and its potential to help them achieve their goals.