Although the lion’s share of alternative funds have yet to dip their toes into Lake Transparency, some small funds are cutting a path for the rest of the industry, in terms of smart marketing…if that’s defined by how clearly they explain their value proposition, and by how well they create investor interest.
Although it doesn’t provide a complete picture, very often you can gauge a fund’s marketing savvy by its website, which in our online world serves as the mother ship for a company’s brand.
So based solely on their websites, here are two small funds that can serve as examples of marketing best practices:
- Monterey, California-based Topturn Capital – a single, low volatility hedge fund, and
- Lake Forest, Illinois-based SilverPepper – a liquid alt firm offering two sub-advised funds
And here’s why these two firms are exceptional:
- Both funds demonstrate that small firms can market themselves very effectively. In fact, smaller funds have a marketing advantage over larger competitors. Fewer people often can mean less politics, a more flexible compliance viewpoint and fewer opinions from the peanut gallery, which serve to dilute core messaging and can kill great ideas.
- Both funds tell engaging, believable stories about themselves. Their stories explain their investment philosophy and commitment to their business in very human terms, directly related to their own life experiences. They don’t pontificate; they connect with people.
- Both funds use video to tell their stories. Seeing and hearing fund principals makes those individuals and their firms credible and likeable. This visceral connection is critical in a business where “management” is consistently cited as a leading factor in fund selection.
- Both funds display thought leadership. Their intellectual capital is showcased, but not in a self-serving manner. Topturn Capital, in particular, succeeds in maintaining market interest and increasing its credibility through well-written blog posts on topics ranging from Ebola to the market impact of presidential cycles.
- Both funds understand the importance of brand strategy. All of the website elements – content, messaging, design, navigation – support a well thought-out effort to differentiate their firm’s value proposition, and to make it memorable. These are not cookie-cutter marketing solutions; and they reflects pride, creativity and skin in the game.
Admittedly, the SilverPepper website pushes the marketing envelope, in terms of what’s acceptable to most hedge fund compliance officers. But here’s what’s significant about the emergence of liquid alt firms like SilverPepper: because of their retail orientation and facility with sophisticated marketing tactics, that emerging asset class will indirectly drive hedge funds to show greater courage and creativity in marketing in the years ahead.
For most hedge funds, whether they emulate Topturn Capital or SilverPepper, the adoption of marketing best practices – or any marketing practices at all – is long overdue.
This article appears as the March edition of “Marketing Alternatives,” a monthly column published in the Barclay Insider Report, a newsletter produced byBarclayHedge, a leading provider of alternative fund data.