As an emerging fund manager, your concerns are different than that of a manager who is just starting a hedge fund. Start up fund managers focus on which trading strategy will be their primary direction, who might be interested in investing in such a fund, and setting up infrastructure, including selecting an attorney and an accountant.
But you’re well beyond that stage.
Now It’s a Different Game
As an emerging fund manager, you’re more concerned with growing your investment base and investor relations. You’re developing relationships with new investors based on your proven fund performance and warm intros from your current investors.
Perhaps you’re considering hiring a third party marketing firm or bring on staff to expand your internal fund raising efforts? Of course, you’ll still need a pitch book but now it will focus on how much alpha you’ve generated over the past several years for your early investors.
These investors are going to do their own fund due diligence and they will investigate your fund in detail. They will go further than just fund strategy and performance. Beyond the quantitative measures, these investors want to understand you and your hedge fund team.
Hedge fund marketing means, in part, ensuring that your information technology infrastructure is reliable. Maybe you’re looking at upgrading to a cloud-based technology infrastructure? Investors want to know that your risk of outage due to technological failure is low. And it really goes beyond marketing. You have to consider the regulatory issues as well and the viability of trading transaction systems and portfolio management. Or perhaps your website no longer meeting the needs of your emerging fund and you need something better?
How have your trading strategies changed from your start up days? What about your assets under management? How have they grown in the past few years and how have you put those investment dollars to work within your investment strategy?
Then, of course, there are the hedge fund regulations you must follow. Although hedge funds don’t have the same reporting requirements as some other publicly available investments, the registration requirements are strict and must be followed. This is why your choice of a hedge fund attorney and other professional service providers is so important. The right service providers are well worth the investment as they ensure your fund stays on track and avoids regulatory issues.
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