As the hedge fund industry matures, the big funds keep getting bigger, with more investments from large institutional investors. This trend continues to make it tougher for smaller funds and new funds to raise capital. They must fight over the “scraps” left by the big guys. These scraps often come from high net worth investors, according to a recent article in All About Alpha. But those scraps represent only a 28% and shrinking piece of the pie.
The good news, according to a new survey released by alternative asset research firm Preqin, is that even the big institutional investors are still keeping an eye on smaller firms, and may be more receptive to a marketing overture than you think.
The Preqin survey showed that 40% of institutional investors monitor 50 or more hedge funds on a regular basis. And nearly three quarters said they would be willing to re-consider a fund they had previously rejected.
Recommendations from investment consulting firms still worked best for getting in to see endowments and foundations. But a direct sales contact worked best in trying to sell into family offices or funds of funds.
The survey also found that US investors relied more on consultants than European and Asian investors, who tended to pay more attention to personal contacts and networks.
Assertiveness counts: more than half of investors surveyed don’t mind being contacted by phone calls or emails. And more than a third don’t mind an emailed document, followed up by a phone call, if there’s interest.
How has your firm adapted its marketing approaches in this more challenging fundraising environment? Add your comments below.
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We are a relatively small fund mostly dependent on our direct contacts. Few institutional investors also came into contacts recently via our marketing team and consultants, though. It has been a comfortable journey with our direct contacts so far.
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