Many successful hedge fund firms reach a size where they can hire a dedicated marketing professional. This person helps promote the firm’s principals, investment philosophy and track record through a variety of marketing activities including:
1) Supervising the design and content of the firm’s website, which may include bios of the principals, articles, white papers, and facts on the firm’s assets under management and performance;
2) Sourcing and supervising an outside public relations firm to increase the number of articles about the firm that appear in relevant publications. A good PR firm can also arrange for the principals to be interviewed more frequently for their opinions on current events that affect the industry;
3) Coordinating various direct marketing activities to current investors and prospective investors (qualified accredited investors). This could include quarterly newsletters on the funds or state of the market, and articles on a new fund;
4) Event marketing: exclusive, private events such as salons, golf trips, conferences, and seminars attract high net worth investors, institutional and family office executives. The hedge fund’s marketing manager would be involved in either organizing these events or supervising outside event management firms;
5) Other targeted marketing activities, such as coordinating the development and publishing of a book by the firm’s principals.
In addition, many hedge funds hire outside consultants known as “third party marketers” to help expand their client base. These consultants introduce new investors or raise capital for hedge funds. In return, the consultants typically receive a monthly retainer, along with a percentage of the performance fee (profit) generated by the investor introduced to the firm. This referral fee arrangement often continues for as long as the investor is a client of the firm.
Thus, in addition to working within a hedge fund as a marketer, some hedge fund marketers choose to pursue a career as an independent, third party marketing consultant for hedge funds.
A quick glance at some hedge fund marketing job postings reveals the background and skills required for the job. A hedge fund based in Greenwich, Connecticut needed a senior marketer to help develop and implement a multi-channel marketing strategy for the firm’s products. The job also involved designing various marketing materials for both direct and third-party marketing activities.
Another hedge fund manager, this one based in Denver, sought an experienced hedge fund marketer with existing ties to high net worth individuals, family offices and investment advisors.
As hedge fund returns begin to pick up again after the rough period of 2008, the many firms will want to get the word out about their performance. These hedge funds will need experienced financial marketers and outside consultants to help with this task.
Geffner, Ron S., Marketing Strategies for Private Investment Companies, Sadis & Goldberg LLLC, New York.
U.S. Securities and Exchange Commission