We’re well into several sea changes in the hedge fund industry that bear directly on fund marketing, sales and client service — three closely related aspects of fund operation. In general, cash is flowing into the industry less readily than in previous years. Institutional investors and HNW individuals are still turning to hedge funds, but preferring established firms with large AUM. Pensions and governmental investment agencies, with bureaucratic overhead that creates load for client service personnel, are becoming increasingly interested in hedge funds and funds-of-funds. Client service overall is becoming a bigger job, as potential investors have more questions and established clients want to keep a closer eye on their investments. Recent decisions by funds to freeze withdrawals during market turbulence have undoubtedly contributed to these trends. Attracting and retaining investors is a more competitive challenge than ever.
A recent job post to Hedge Fund Search Digest by a major bank and financial services organization indicates four areas of responsibility for a hedge fund investor services professional:
Service Delivery — Serves as primary contact point for fund investors, and for fund managers for issues relating to investors. Provides documentation to authorised parties. Opens new investor accounts ensuring compliance with the company & government regulations. Processes investor transactions in line with company & government regulations. Processes cash movements associated with investor activity. Ensures that fund records are maintained in a complete and organised manner. Produces internal operational reports. Particular responsibility for the second-level review of activity by team members.
Team Leadership — Trains and mentors others, educating as to polices, controls and procedures. Provides an escalation point and ensures that line management is made aware of issues in a timely manner. Highlights resource constraints to line management.
Compliance — Has detailed knowledge of funds’ offering documentation, funds’ domicile regulations and internal policies and procedures. Particular emphasis on anti-money laundering controls.
IT and Operations — Identifies system enhancements to reduce operational risk, create operational efficiency or improve customer service. Participates in specification, testing and operational implementation during the project life cycle.
The requirements for a client service position are flexible. An advanced degree in business, economics or a numerical discipline always helps. Supervisory experience and previous client service experience are also advantages. It’s possible to be hired without exposure to alternative investments or finance, but significant work & educational experience must compensate. The Hedge Fund Marketing Alliance and the Third Party Marketers Association are two professional marketing-focused organizations that may be useful from the perspective of client service as well.