A close friend of the firm recently forwarded a thought piece on IR from Walek & Associates, the financial PR firm.
The short document tackles the emergence of professional Investor Relations in the evolving hedge fund industry. My background is in corporate IR – helping public companies communicate to the buy and sell side – and I have long espoused the view that the hedge fund world is 5-7 years behind the public IR universe in the practices, process and professionalism of its investor relations activities.
We hear time and again that the model is changing from a “pitch performance” transaction model to one of partnership and “solution provider.” Competing effectively in this new environment requires enhanced marketing and IR infrastructure.
In corporate IR world, the IR person used to be an outpost where someone might go after a stint in treasury. However, the position evolved and was elevated to have direct communication with the C-level and require a more robust skill set over and above corporate finance including strategic planning and communications.
That’s what’s coming down the pike for the Hedge Fund world. Many fund managers came from the prop side, not the asset management business and as a result the notion of being a “Fiduciary” or having empathy for their investors is foreign. Their businesses are built this way, emphasizing portfolio management and trading over IR.
Those days are over.
The article correctly points to two points.
1. IR/Marketing are now getting involved in the crafting of investor communications including quarterly letters, materials etc. This is an important development as they are the ones at the mine face, talking to investors, understanding their concerns and questions. Their involvement is critical as they are helping create the hf …
2….BRAND. I have been talking about branding for a long time. The good people at Walek correctly identify that establishing a brand, the process of BRANDING, through communications channels, practices, reputation is now critical. It’s not possible to be a quirky little shop that nobody has heard of. As I say, a brand itself will not sweep the problems of the last 12 months under the rug, however, the practice of BRANDING is now more important than ever.
Enjoy the piece.