Since 2013 hedge funds have been legally allowed to advertise. So why don’t we see more marketing efforts from hedge funds?
The advertising rules change was a result of the JOBS Act (Jumpstart Our Business Startups Act) and until recently it seemed as if legal conditions were making many hedge funds gun-shy about potentially incurring penalties due to the myriad of disclaimers and disclosures that still govern hedge fund marketing.
But, in the last three years, there has been a surge in hedge fund marketing online in order to reach more accredited investors.
Traditional Hedge Fund Marketing
Traditionally, hedge fund marketing has taken the form of so called “relationship marketing” and was mostly done face to face. Traditional relationship marketing methods include, speaking arrangements, attending conferences, putting on client events, executive roundtables and, yes, even on the golf course.
The problem with this kind of marketing is that it is limited by the size of your network, and can often be very expensive.
Enter online marketing, which is not only cheaper, but can be tracked and tested to a much greater degree, allowing you to know exactly where your marketing dollars are going and how well each campaign is performing.
Let’s look at some specific tactics you can use to get more clients using online marketing.
Lead Magnets
Lead magnets are pieces of content, which are given away for free in exchange for providing contact information. Generally lead magnets take the form of reports, or ebooks, which explain a key issue, such as, how to save for retirement, how to maximize your returns or how to lessen your tax burden when investing, or AQR’s research on Modeling and Managing Volatility.
Videos
Videos are another great way to get clients to your site. You might consider adding a video of the fund manager explaining the fund philosophy. You can also use videos of media appearances, conference presentations, or educational videos about a single topic or issue related to broader finance or money management issues as a way to get people to your website. RCM Alternatives leverages video in their educational series on Managed Futures.
Newsletters
A newsletter is one of the best ways to reach out to your existing audience. A newsletter allows you to provide value directly to anyone who has already indicated interest in your services by signing up for your email list.
The most important thing with a newsletter is to have compelling headlines which will entice your audience to open them. Here are just a few examples of headlines that could get people to click through to your website:
- 7 important questions you need to ask before investing in a hedge fund
- Why everything you’ve heard about investing in hedge funds is wrong and what you need to know
- The 3 biggest investment mistakes you don’t even know you’re making
You can use your newsletter to discuss whatever you want, but the hedge funds that are getting the best results tend to focus on industry news or performance insight. A good example of this is, SilverCreek’s Private Credit Market Updates.
The last thing to keep in mind is that you want to use an email service like Aweber which will allow you to take advantage of advanced email analytics like open rate, clickthroughs and A/B testing.
Social Media
While most people think of social media as a way to keep in contact with friends and family there are a variety of uses for online marketing. Posting articles and infographics on Linkedin can connect you with a large audience of professionals interested in investing.
Starting a facebook group related to investing in hedge funds is a low cost way to build an email list of interested people. Even twitter can be used as a way to promote articles, infographics and relevant information about your hedge fund. Interestingly, YouTube has the best conversion rate for social sites with an average of almost 3 page views per visitor.
Landing Pages
Landing pages are the actual pages that your content will be directing visitors to. You want to make sure that your landing page has compelling copy written in plain English that is focused on explaining the benefits of your lead magnet and your fund to potential investors. Video on landing pages has also been shown to increase conversion rates because it increases the trust factor. So, consider adding video to your landing pages as well.
Where to Start
The place to start is developing a formal plan but few managers actually do this. According to Frank Serebrin, President at InCapital Marketing, “Most emerging alternative funds and start-ups… don’t have a thought out and written down marketing plan, whether it’s traditional, inbound or content driven.”
Part of the plan is establishing an online marketing budget to pay for web design, creating infographics, paying writers, and establishing content partnerships to have established sites share your content.
Once you have your budget together, a good next step is to create a marketing calendar so that you can schedule when to post various content on different platforms and establish a timeline for creating and testing a few different tactics.
Once you’ve done that, start publishing content and testing its effectiveness. The key here is getting started. The more you publish, the easier it will become.
For more on the advantages of online marketing for hedge funds, we invite you to watch our training video on the Basics of Hedge Fund Marketing.
