Hedge Funds Go On Offensive

Hedge Funds Go On Offensive

By Matthew Beaton    Read full article here

Hedge funds are written about as a monolith. At best, it’s an industry of personalities; at worst, one of villainous robber barons. Few in the press, much less the public, know about the innovative strategies managers employ to minimize risk, find alpha and maintain low correlations.

Sure, some major shops will get the profile treatment (often for the wrong reasons), but in general, there’s a fundamental disinterest in how managers invest. The strategies are too diverse, the tactics too nuanced, and the public’s demand for information too small for reporters to find and report on them all. Few managers want to give the public a peek behind the curtain.

But to change that, managers must dig into their histories, build their backstories and explain, through anecdotes, how and why they invest. They can look to Silicon Valley as a guide — tech giants’ dorm-room startup stories are known almost as well as their logos, and their sweeping visions transcend products and quarterly numbers.

Planning Outreach

It starts with an attitude shift. Managers must embrace openness with the media and take every opportunity to tout their strategies and defend their products.

This means informal phone calls with reporters, in-person meetings with editors and short-notice availability to comment on the market. It means proactively calling and emailing to comment on news events and market trends. It means publishing opinions and research in journals, trade publications and the mass media.

Managers must build an effective outreach plan, highlighting how they will differentiate themselves in the market, respond to bad hedge-fund press and highlight their own value. They can no longer count on mystique and exclusivity to drive a steady stream of clients to their doorsteps.

For instance, they could respond to the recent report on the SEC investigation into hedge funds’ IPO share routing by citing their role as a vital funding source for public offerings. That role is especially valuable since new SEC Chair Jay Clayton has repeatedly stated his desire to increase IPOs while leading the agency.

As fund-culling continues and negative news abounds, managers owe it to themselves and their clients to go on the offensive, reclaim their public images and enhance their brand equity. Their investing tenacity must be accompanied by public advocacy. The industry’s future may well depend on it…………  Read more

Matthew Beaton is the head of the New York City-based public relations firm, Beaton PR, which specializes in media relations for financial firms. He holds an M.A. in mass communications from the University of Florida.