Posted by & filed under Hedge Fund Marketing.

anti sign

The purpose of this blog is to alert our readers on hedge fund marketing issues, trends, developments and share best practices wherever possible. However,  rarely (mercifully) we are afforded the opportunity of commenting specifically about what not to do. Last week I was given two opportunities that I feel compelled to share.

1. Call 1:

Chronic Fatigue Strategy

A gentleman called, did not identify himself, got the name of the company wrong and immediately launched into a round of casual questions including, “who are you…what do you do…?” After securing his identification, I asked him for the purpose of his call. A relative was interested in starting a fund and has a 10 year track record and all he needs is a few million to get started. I gave my honest assessment of the challenges of raising start-up capital, during which he interrupted me and explained further that the reason his relative wanted to start a fund was that he had chronic fatigue syndrome and was not able to work at an investment bank or asset management company.  “If I could just get him set up wtih a few million” he would be taken care of. He offered to fax me the returns.

Call 2:

“Transmit” on, “Receive” broken

I customarily call new registrants on our site. I enjoy hearing about the investment strategy, bios of the principals and marketing strategy and success to date. It is a business of entrepreneurs and I enjoy the individual stories.

During one call recently, the manager answered the phone and proceeded to launch into a 45 minute spiel that I had to struggle to interrupt. During this illuminating verbal exercise, I learned about his unique strategy that is a long-only equity portfolio, his marketing approach of email blasting thousands of people without permission, and that apparently you can’t call an Ivy league endowment out of the blue and ask for $10 million.  Apparently the same goes for large West Coast Pension funds that start with the letter “C.”

I had to redirect the “conversation” back to hedge fund marketing and Hedge Connection when the soliloquy turned to ebonics and relative merits of different tobacco products.

These conversations were truly among the most bizarre that I have had since entering the business – and I have a “wall of shame” with the business cards of people that I have met at industry events that are in jail.

While (hopefully) outliers, some conclusions can be drawn that might be of use to the general hedge fund population.

1. Research your target before picking up the phone. Nothing sounds worse, or provides a worse impression than having someone not know or mispronounce the name of your company.

2. Listen.  It has  been my experience that managers like to talk  about themselves and their strategies….moreso when they are nervous. However, people are busy, be respectful of people’s time. Don’t interupt. Let people finish questions.

3. Fax=no.

4. Nothing is a greater turn-off than hearing how the investment will benefit the manager. Rather the focus should be squarely on how will the investment strategy will benefit the investor.

5. Yahoo, gmail, hotmail and aol email addresses are a tough way to be introduced to a fund. Website domains are inexpensive. Email accounts are cheap. It is a worthwhile/necessary expenditure as a first step.

I share these experiences not to ridicule, but to demonstrate the gap that exists between what’s required to succeed and some examples of what’s going on in the marketplace. Any similar experiences?

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