Because of the high competition between hedge funds, marketing a hedge fund is a challenging task, but with the best practices and strategies a lot of it could be put on autopilot. Any successful marketing campaign starts with understanding your potential clients profile. If you are not sure, who invests in hedge funds and why do they invest in hedge funds (besides high profit potential), check our article Hedge Fund Investors by Type.
Institutional investors may be your best potential clients, but they are hard to get. For a new hedge fund it makes sense to focus on smaller investors such as business angels, high net-worth individuals and family offices.
Any hedge fund manager planning new marketing campaign, must keep in mind that investors are already overloaded with information and ads from your competitors. Indeed, people today have access to more information, then they can consume. When it comes to investment assets, investment funds and strategies, situation is no different. So remember that your message is addressed to a well informed person, who can and most likely will run a thorough research about the fund, the strategy and the managing team. Successful hedge fund marketing starts with positioning and strong personal branding. If you don't have a reputation or proven background in the investment niche, you may either hire a manager who already has strong reputation or build it from scratch. The latter is not as hard as it sounds. Thanks to the internet, reputations can be built (and also ruined) fairly fast.
The tips below are addressed to the startup hedge fund managers to help them establish personal reputation. Aspiring managers may choose to do it themselves or fully or partially assign to their fund marketing managers.
This may sound like a no-brainer,but you will be surprised how many people forget about this step. Make sure you have at least one presentable social media profile. There is no need to make it strictly professional, right personal photos and stories mixed with professional tips and opinions are good for your reputation and make you look trustworthy. We're all humans after all.
Writing an e-book instantly makes you from unknown asset manager to an author (even though you don't actually publish it anywhere but on your website). Although an e-book itself may not impress potential investors, at least it will add you credibility in the eyes of blogger and journalists.
Networking is key. You may negotiate the interviews to be free or paid, but be prepared to reach out to a lot of people before you find those 5 who will accept this offer. Simply prepare a good pitch email and send it out as many times as needed. If you are struggling to find bloggers, try Buzzsumo.com or similar websites with influencer databases. The main goal of the interviews is to show your expertise, so try to provide valuable tips to the readers.
Once you have established some reputation online, you become interesting for small to medium sized mass-media. Now is time to reach out to journalists. An easy way to grab their interest is by offering help. All kinds of media outlets need experts to answer their questions every now and then. Let the journalists know that you're available should they need your opinion. Keep pitch emails short and simple, mention which subjects you can cover, and add 2-3 sentences explanation of what makes you an expert (don't forget to mention the book here). Make sure to leave your contact details, including phone number and email, so they can reach you at any time.
Getting replies from journalists may take time - you never know when they will need your opinion. If you choose to go an extra mile, add people you have sent emails to on social media and if they respond to your request, interact with them from time to time. This way journalists will be more likely to think about you when they need an expert.
Before you start a marketing campaign, google your personal name and also your hedge fund name. Are there enough links? Do they look trustworthy? If you're not happy with the results, consider developing more social media accounts for your organisation - they usually rank well in search engines. Even better way to get credibility is to get mentioned by other reputable websites. Once you like the results on Google's first page, it’s time to start reaching out to potential investors.
Typically for a hedge fund first clients after friends and family are high-net worth individuals and business angels. Reaching these people is a challenging task, but this process could be partially automated.
One of the ways to get contacts of high-nets is by browsing websites of charitable organisations. Many of them publish names of their largest supporters. This project is time-consuming, so consider hiring a freelance virtual assistant to do this. Once you have a list, there is a number of ways to get the emails, one of them is by adding your prospects on LinkedIn (if you are not sure how to do this, there are detailed tutorials available online).
! Before adding anyone on LinkedIn make sure you have a good-looking LinkedIn profile.
Don't stop at sending just one message. Prepare several different pitch e-mails that show data-backed benefits of investing in your fund.
Tip: instruct your copywriter to avoid long rows of adjectives and look at the texts from your clients perspective ('brilliant highly-profitable lucrative market' doesn't sound as impressive as '12% average return in the last 10 years').
It is important to keep pitch emails specific, but short. The messages could be scheduled to go out every 2-3 days on an autopilot using special software. However, when a recipient demonstrates interest greet them with personal advice and attention.
Offline networking can be a great tool in bringing high net-worth investors into a hedge fund. If possible consider attending investor conferences or high-profile charity events in your area.
Another way to get attention of potential hedge fund investors is by targeted advertising.
It is best to also narrow this list by geo location. For example, lawyers in South Africa or dentists in New York have high salaries and there are high chances they would be interested in hedge fund investments. Another way to target high profile clients is by narrowing your advertising to expensive neighborhoods. Homeowners in these areas are also likely to become hedge fund investors.
What not to do: don't waste time advertising through luxury car communities or to people interested in Bentley, Maserati or any other premium brand. Premium brands gather not only owners, but also fans, a lot of them don't have enough money for hedge fund investments.
There are plenty of opportunities to demonstrate your ads to certain groups of people from the previous step. Compare different channels and choose the ones that suit your plan and advertising budget.
Quick facts about pay-per-click ads:
To reach specifically lawyers, dentists or accredited money managers consider utilising the power of professional communities (social media groups and discussion boards). Many of them will be glad to place paid ads as this is their primary source of income.
It would be unrealistic to expect that people will invest into the hedge fund at the first encounter. Instead of advertising a hedge fund, think of the ways you can bring value to them. A very effective way to do this is through a webinar. Webinars are extremely popular advertising tool today, because they convert strangers into loyal customers. Think of the value you can provide to your potential investors and their problems you may address. For example, you can prepare a webinar about diversification or share a successful investment strategy. It’s best to be specific and talk to your narrowed target group.
Example - Ad text for lawyers that says: 'how to evaluate your investment portfolio while preparing for a court trial' is more likely to grab their attention than generic 'how to evaluate your investment portfolio in 15 minutes'.
Every promotional email and every ad lead people somewhere else. Landing page is the place where a prospect decides whether he wants to deal with this business or not. It's more important to have professional landing page than a professional business card. Make sure the page you direct people to has precise and easy to read information about your offer (in our case webinar) followed by well-defined call to actions (register now for a 60-minute live webinar).
The goal of offering a webinar or other incentive is to get attendees acquainted with your organisation and to gather their contact information. While the webinar or other incentive should not be too salesy and must be focused on value, several days after a webinar are best for conversions. Offer another time-sensitive incentive to your recipients. A good example is a personal one-on-one consultation or portfolio review for people who meet your investment requirements (mention this offer several times in the follow up emails).
It takes a lot more than one ad for a prospect to sign up for an offer. As long as people don't opt out keep sending informational emails as often as you can without being annoying.
Offer a second webinar or email valuable investment insights regularly to enhance trust and further improve credibility in the eyes of your potential investors.
Utilise retargeting campaigns. Retargeting campaigns by Google and Facebook are a powerful tool. They allow business owners reach people who have visited their websites, but didn't sign up for the offer. May be they were not ready at that time? May be they didn't have enough time on the first visit? It makes sense to build a separate landing page for retargeting campaigns with the same offer but slightly different highlights.
Although it's a good idea to automate hedge fund marketing as much as possible, high profile clients prefer personalised service. Make sure there are experts available to professionally answer investors questions on the phone, online or via emails. To establish trust make your credentials and legal information easy to find and never stop working on your fund reputation. The more people can recommend you online or offline to their friends the better.
Although strategies mentioned above will work for individuals with money, a different approach is required to get attention of the largest hedge fund clients. There is no better way to market to institutional investors than personal approach. Forget about mass-mailing and mass-advertising and invest into a thorough market research instead.
Search for organisations interested in hedge fund investments in your area (these could be pension funds, venture capitalists, insurance funds, funds of funds, nonprofits etc.).
Check if someone in your circle can introduce you to the fund managers. Despite the evolution of the communication methods, personal recommendations from people we trust are still the best advertising method.
Carefully research each firm before you try to approach them. Learn about their other investments and decision makers. Because the funds may take 6 months or even longer to make investment decisions, don’t just spam every potential investors. Look for the ones that seem most interested and will benefit the most from investing into your fund.
Follow fund managers or analysts on social media (primarily on LinkedIn), try to attend conferences or other events they could also attend. Interact with the managers online if this feels appropriate so they get familiar with your name (for example commenting on a family photo may be not appropriate, while congratulations with a personal milestone are fine. Rely on your common sense to decide).
Don't get too obsessed with socialising. Although it helps a little if your name sounds familiar to some of the funds analysts, what really matters are your fund’s performance stats. Highlight the most important numbers and benefits in your pitch email and include a personal note for the analyst if you can.
Same as with approaching individual investors, persistence is key. Try to follow up your pitch with a phone call after 3 days and prepare one or two follow up emails.
CEOs, celebrities and large fund managers are a lot easier to approach then it seems. Like most people, they rely on professional managers and advisors as well as on the word of mouth. Best way to find this type of clients is through networking. If you convince one HNWI to trust you their money and bring them stable returns, chances are their friends will show some interest in your fund over time. This principle also work for funds, once the managers see similar funds among your clients, they are more likely to invest. Spend as much time as it takes to line up first clients, using these hedge fund marketing best practices: