By Jennifer Prosek, Prosek Partners, formerly CJP Communications -- I like to call the hedge fund industry the "emerging market" for marketing and public relations. This is because, of all areas of financial services, the hedge fund industry has been slowest to embrace the importance of marketing, branding, thought leadership and communications (public relations). Hedge funds have always had the excuse that regulation has kept them from marketing. That excuse is about to go away.
The Jumpstart Our Business Startups (JOBS) Act will raise the bar and force the discussion of brand in every fund’s board room. Because it will allow funds to advertise and market more aggressively, many funds will begin to discover the power of having strong messages and a more powerful brand. Progressive funds will unleash the power associated with having a brand that means something, and their success will force others to contemplate who they are and what they stand for in the market.
I recently moderated a panel on the JOBS Act at the SkyBridge Alternatives (SALT Conference) in Las Vegas. My panelists included a lawyer, a capital raiser and an advertising executive. The panel was during a 3:10 p.m. breakout session, traditionally a death slot at a conference. I was surprised to see the entire room filled. I was also surprised that all of the panelists agreed that the JOBS Act is a major milestone for the industry. In fact, when asked to rate the JOBS Act from 1-10 (10 being a major industry mark), they rated it an average of a 7!
Although we are unsure exactly how the provisions of the JOBS Act will play out (we should know more in July), here are some observations from the panel that are worth sharing:
1. Public relations activity will increase: Speaking to journalists about your fund becomes fair game thanks to the JOBS Act. Public relations (earned media) has already been the favored marketing and reputation management tool for hedge funds, therefore we will see media relations activity ramp up at most funds.
2. Hedge fund Web sites will change: Fund sites have traditionally been uninviting and scared away investors. They didn't showcase and humanize their managers. Tomorrow’s sites will showcase the fund, its brand and its managers. Disclaimers will remain, of course, but we will see Web sites become more modern and inviting.
3. Advertising will fuel the mutualization of hedge funds: Small funds will be the most aggressive.
4. Brand will become a discussion in the board room: All funds, large and small, will be more focused on their corporate identities, brand positioning, messaging and marketing execution.
5. Capital fundraising is excited: Capital raisers see marketing as an under-utilized weapon and are bullish on the future of funds thanks to the JOBS Act.
Large funds may dismiss the JOBS Act, but if they do, they are making a big mistake. The JOBS Act will raise the branding bar across the board and all funds—big and small—should be ready to embrace the opportunity.
Jennifer Prosek is Managing Partner of Prosek Partners, formerly CJP Communications, a top 35 independent public relations firm with offices in New York, Connecticut and London. CJP’s Hedge Fund Practice comprises a range of clients from emerging managers to the world’s largest hedge funds.