Now that hedge funds are allowed to market their businesses, many are wondering when the first hedge fund commercial will appear on television.
April Rudin on hedge fund marketing
April Rudin, a financial services marketing strategist and digital media expert, believes that hedge fund marketing is more than a 30-second spot on CNBC.
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When talking to fund managers during a recent webinar, she worked hard to fill them in on everything they needed to know.
“What we did was really explain marketing to hedge fund managers, because marketing isn’t advertising,” Rudin told StreetID.
New strategy for hedge funds
As the founder and President of The Rudin Group (a firm that specializes in building integrated marketing, branding and communications strategies for the financial services industry), Rudin is getting a first-hand look at who will advertise and when. She said that a “significant” number of hedge funds have come to her in search of a new strategy.
“All these [marketing-related] words are all foreign, and when they think about marketing, they reinterpret it into advertising,” said Rudin. “They don’t think about it as brand-building. They don’t think about it as visibility.”
Rudin, who is also the Chair of the Hedge Fund Association’s High Net Worth Advisory Board, said that the most important thing for hedge fund managers to know is that 98 percent of new wealth inheritors are changing advisors.
“Trillions of dollars are being transferred through succession planning,” she said. “Guys that are [in their 20s and 30s] are more interested in more transparent investments and hedge fund strategies they can understand.”
And by “transparent investments,” she also means those that are having a positive impact.
Boitech and impact investing attractive
In fact, a firm’s track record is no longer tied to returns alone. Investors are now looking at the overall good that a fund may bring to society. Biotech and impact investing are particularly interesting to this crowd.
But these investors won’t go to a firm they don’t know exists. That’s where a good marketing strategy comes into play.
“Hedge fund managers don’t understand the idea that, perhaps they’re not accepting money now, but that doesn’t have anything to do with building their brand,” Rudin explained. “The way that you really need to build a brand and the way you need to target a segment and go to your audience is to segment them, and the way that you would market and the kinds of investments that Kim Kardashian would be interested in are not Warren Buffett’s, right? There’s lots of different accredited investors in between. They’re retirees, business owners, etc.”
By marketing to those individuals, some fund managers are already taking advantage of the opportunities that the JOBS Act has provided. In time, others will follow.
“I think what will happen is, people will come slowly, and then the larger films will realize that they do have opportunities,” said Rudin.