Fundraising has drastically changed and become exponentially more difficult.
The below graphic is a brief example of the newest research available in the Johnson & Company Fall 2016 Marketing & Fundraising Masterclass For New and Sub-Institutional Hedge Funds.
The research and evidence are clear: Investors have become extremely selective, more idiosyncratically demanding and highly skeptical, due in large part to the credit crisis, Madoff and a dynamic regulatory climate. As such the decision to invest in a new or smaller hedge fund is now based on a large, expanding and ever-changing set of qualitative and quantitative factors well-beyond investment performance. Therefore, marketing for a new or sub-$100 million AUM hedge fund must go beyond the basic activities of distributing performance data and pitchbooks, posting performance to databases, talking solely about returns, occasionally attending conferences with the hope of encountering the right investors and inconsistently engaging those investors with an expectation of raising assets.
New and smaller Hedge funds targeting single family offices and/or the institutional market would be well served to avail themselves of research about the qualitative and quantitative aspects likely to obtain the most attention from investors to develop and execute the marketing process accordingly.
The realization that marketing has to happen to raise assets is only half the battle. Candidly, marketing for a new or sub-$100 million AUM hedge fund is perhaps the most mistake-filled, mis-understood and mis-informed aspect of operating a hedge fund business and the main reason the vast majority of new and smaller funds fail raising assets. The fact is marketing and raising assets are distinctly separate but complementary processes. Moreover, marketing and raising assets for a sub-institutional fund are completely different than for a larger, more-established or seasoned fund. As such, the biggest problems for most new and sub-$100 funds are they have no real marketing process, don’t know what’s right to do marketing and how to do it. This leads to lots of “guesswork”, poor choices, inconsistent behavior and fatal mistakes adding up to wasted time, money and effort, culminating with chronic failure raising assets.
Plainly speaking, the fundraising climate is filled with stringent expectations by investors along with increased operational requirements. As such, marketing must now be more sophisticated, more consistent, more frequent, more expansive, more intelligent, more thoughtful, more focused, more structured and more disciplined for a new or sub-$100 million AUM fund to get results raising assets. Simply, it now takes a good deal more than pure investment performance to raise assets and every new or smaller fund must increase the quality, volume, intensity and execution of the marketing process to succeed raising assets.
MARKETING IS NOW A CRITICAL ASPECT FOR SUB-INSTITUTIONAL HEDGE FUNDS.
I hope you find the above helpful. If you would like to equip your fund with an executable marketing process that is appropriate, efficient and effective to optimize raising assets in the current climate and beyond, contact:
Bryan Johnson, Managing Partner
Direct: 512-786-1569 or [email protected]
WHO IS JOHNSON & COMPANY:
Johnson & Company is the ONLY firm singularly dedicated to delivering objective, conflict-free, client-focused, experienced, professional marketing and fundraising advisory services to sub-institutional hedge funds. Since 2010, we have provided 400+ managers and funds with the answers, resources and solutions for economical, expedient, effective and efficient marketing and fundraising execution. As a result of 20+ years experience, we serve as THE intelligent interface and leading source of marketing information, insight and intelligence for new, early-stage and sub-$150 million AUM hedge funds.