I was at a marketing conference a couple of years ago and I was reminded of the streets of Boston. In the following video, I talk about how cow paths relate to hedge fund marketing and how understanding this concept can help you raise capital.
Video Transcript/Summary: The strategies and tips provided within this video module include:
Coming soon.
I hope that by understanding the concepts of cow paths and educational marketing you can improve your capital raising strategy.
The educational marketing approach is one that I have found can be useful in capital raising. In the following video, I explain the educational marketing strategy and how it can be effectively used in capital raising.
Video Transcript/Summary: The strategies and tips provided within this video module include:
Educational marketing is one of the most effective ways of growing capital, leveraging your time and positioning you as an authoritative figure. It also increases transparency, a vital consideration these days considering a recent report highlighting 78% of institutional investors will only invest in something they understand.
Whilst some funds are highly sophisticated, top secretive and black box, it is much more powerful and beneficial to be transparent and show the inputs in your investment process and where your competitive advantage lies. A10,000 foot view, which provides an easy-to-understand overview of the process and core components, is required.
Four ways to market your hedge fund in an educational way are (i) dedicate 20% of your presentation to educational content, (ii) have a folder of marketing material to deliver to clients when you meet them, (iii) practice speaking and writing (iv) target wealth management firms and financial planners.
Dedicate 20% of your presentation to educational content, footnoting industry terms and providing explanations at the end. Explain the process in a straight forward manner and give an overview of the team before getting into trading or risk management tools.
Have a folder of marketing materials to deliver to clients when you visit them. This includes a one pager, powerpoint presentation, monthly/quarterly reviews and a white paper, either delivered by someone within your firm or elsewhere.
Practice speaking at conferences where your investors go to, not your competitors, and write at least one article per week on what you are learning, in order to synthesise your knowledge.
Target wealth management and financial planners, who have little knowledge on hedge funds, compared to institutional investors. There is a great opportunity here to provide them with detailed marketing material, each varied in terms of their sophistication. These wealth managers will in effect, act as a sales representative of your materials, to their high-net-worth clients, which is an extremely powerful tool.
The educational marketing strategy can be an effective tool for raising capital.
I worked for years as a third party marketer for hedge funds and in the following video I am going to explain what third party marketing is and the role of third party marketers.
Video Transcript/Summary: The strategies and tips provided within this video module include:
The definition of third party marketing is the hands-on capital raising and marketing of investment funds by independent consultants that work outside of the fund.
Third party marketers typically receive 20% of the fees that are billed on the assets raised although this number and structure varies by fund and contract.
There are low barriers to entry for third party marketers and it can be very lucrative.
Third party marketing firms typically take on 3-5 clients at one time.
Some third party marketing firms work on a retainer as well as a percentage of the fees on the assets raised.
The other model is to not charge a retainer but the third party marketing firm will take on many more clients, often across a broad spectrum of strategies.
A growing trend in third party marketing is to have the firm focus on a single distribution channel such as endowment funds, pension funds, etc.
Be very detailed in your contract negotiating to avoid later disputes.
I hope that this video has provided you with a completed definition of third party marketing as well as some tips for evaluating third party marketers.
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