7 Keys to Marketing to Hedge Funds
The hedge fund industry has over $3.1 trillion in assets, making it an extremely lucrative industry for marketing.
The hedge fund industry is huge. We’re talking $3.1 trillion in assets as of June 2017, with another $300 billion in fund of funds. Likewise, the potential for marketing to hedge funds is enormous. Not only is the industry huge, but despite the occasional misstep, the industry is continuing to grow quickly… assets under management have increased 70% in the last five years.
But it’s not easy – many hedge funds go out of there way to stay out of the spotlight.
Below are 7 keys to marketing to hedge funds which could give you a significant leg up on your competition. Whether you’re selling a hedge fund specific product, like trading and analytics software, to service like accounting or private jet leases, this guide will give you actionable steps to begin marketing to the lucrative hedge fund industry:
1. Know Your Value
This should go without saying, but one of the most important elements of hedge fund marketing, or any marketing for that matter, is to understand your value proposition and be able to articulate it clearly. What problem does your product solve for hedge funds? How does your product/service solve it better than your competitors?
Is your product new? Be sure to have a detailed business plan. How do hedge funds fit into this plan?
Have an existing product? Great! What’s your pitch? Have you worked with financial services companies before? If so, how have you helped them grow their business? Or, how have you improved or simplified the lives of your users?
Hedge fund managers are busy. Unlike some money managers, hedge fund managers are paid for performance. So you can bet they are busy. Make sure you can concisely and effectively communicate your value.
2. Understand the Hedge Fund Industry
Much like understanding your product, understanding your target market is a critical component of all marketing, not just marketing to hedge funds. There are close to 10,000 hedge funds. They range in size from tens of millions to tens of billions. While a large majority are based in key financial centers like New York, London, and Hong Kong, they are scattered across the globe. There are also employ a wide range of strategies. A fund investing in emerging markets is going to have a different needs from one investing in US real estate, for example.
Here are some free hedge fund resources to help you better understand the industry and improve your hedge fund marketing:
Private Fund Data (duh!)
3. Narrow Down Your Prospects
With close to 10,000 funds, it’s important to focus in on exactly what type of hedge fund you want to market to.
Looking to market your product or service to the very largest hedge funds? Maybe shooting for a list of the Top 250 Hedge Funds is a good place to start. As you know, Private Fund Data allows you to search thousands of hedge fund companies and can be a good place to start.
Or maybe you want to market to hedge funds via email? Try something like this hedge fund database.
4. Nail Your Marketing Pitch
Hedge fund managers are busy…very busy. Most will probably outright ignore you. So when you get your chance, you need to nail your marketing pitch. There are rarely, if ever, second chances.
You may end up pitching by email. If you’re fortunate enough to get a hedge fund manager on the phone, you might get 60 seconds or less. You might be aware of the two minute sales pitch. Better cut that in half to be safe.
If you’re marketing to hedge funds via email, make sure you’ve brushed up email marketing. There are literally thousands of websites with email marketing tips. But again, the key is keep it concise and effectively demonstrate your value in the first couple sentences.
5. Understand Your Competition
In many ways, marketing to hedge funds is no different than marketing in general. But there’s one key difference. Hedge fund managers make a living (or at least purport to), by quickly recognizing the difference between good companies and bad. In fact, there is $250 billion invested in long/short equity hedge funds. These funds entire investment strategy is based on being able to identify and sort the good companies from the bad.
If you’re not able to communicate why your product or service is clearly superior to your competition, you really don’t have any business marketing to hedge funds in the first place.
6. Be Tenacious
Number six could just as easily have been the first key to marketing to hedge funds. If you’re easily discouraged, hedge fund marketing is probably not the right field for you. Be tenacious.
Still not getting the feedback you’re looking for? You’re definitely not alone. But then again, no one said marketing to hedge funds was going to be easy. Be determined, be patient, be insistent. And most of all constantly evolve. Learn from your feedback. Refine your pitch, switch your tactics and whatever you do, don’t give up.
7. Be a Guerrilla
The term guerrilla marketing comes from unconventional, or guerrilla warfare. Though guerrilla warfare probably dates back almost as long as people have been warring, its usage with regard to marketing is relatively new. In 1983 Jay Conrad Levinson wrote his book, Guerrilla Marketing.
Over the last 25 years, 1000’s of marketers have built on the original ideas of guerrilla marketing. Here are 80 great guerrilla marketing ideas. Most of these won’t apply directly to your efforts to market to hedge funds, but they should definitely get your mind spinning.
The key to guerrilla marketing is to think outside the box. How can you get the attention, of very busy, very wealthy, people without spending a lot of money yourself?