Every year, millions of Americans tune in to the nation’s biggest sporting event: the Super Bowl. Virtually every industry has used the Big Game to promote its products and services.
Every industry except for hedge funds, that is. For better or worse, viewers shouldn’t expect that to change next year — even if the JOBS Act makes it possible.
“I don’t think you’re going to see that at all,” Evan Rapoport, CEO of HedgeCo Networks, told StreetID. “In fact, I think what you’re going to find is very targeted types of advertisements. They’re going to really want to appeal to only those that are qualified and allowed to invest.”
Value Partners Asia ex-Japan Equity Fund has delivered a 60.7% return since its inception three years ago. In comparison, the MSCI All Counties Asia (ex-Japan) index has returned just 34% over the same period. The fund, which targets what it calls the best-in-class companies in "growth-like" areas of the market, such as information technology and Read More
One of the drawbacks of advertising on TV (during a sporting event or regular programming) is that 99 percent of the people watching will not even be allowed to legally invest in the fund.
“Putting up a billboard is pretty ineffective in that manner in that you’re just not targeting the right audience,” said Rapoport.
In providing an example of a more targeted approach, Rapoport pointed to his own site — HedgeCo.net. “Let’s say someone is on HedgeCo.net and is searching for a certain fund on our database,” he said. “[One] that is worth more than $25 million, has less than five percent draw down, and produces over 10 percent return. Prior to potentially getting their answer through our database, maybe they get a pop-up ad of a fund that does meet that criteria. That’s fairly targeted.
“You may also find hedge funds advertising at golf events where they know the mass affluent attends. Doing promotional campaigns that are, again, optimized and targeted toward the financial industry.”
Don’t expect to see commercials on any of the mainstream TV networks either. “Maybe on CNBC, but again, even then I don’t think you’ll really see commercials,” said Rapoport.
However, you might see the hedge fund managers come out of their shells.
“You often don’t see a lot of fund managers on networks,” Rapoport added. “Often you’ll see people that work at funds, but not a lot of fund managers. The reason is because if they were to say something about their fund that could be misconstrued as advertisement, they would be sanctioned by the SEC. I think once this passes you’ll find fund managers going on TV and discussing not only their posture on the marketplace but their fund and how it’s performing and their strategy.
“So while it may not be an overt or blatant advertisement, you can at least talk about your product. I think you’ll see a lot more of that, and I think it will be a huge benefit to the industry.”