Hedge fund industry expanding
As Hedge Fund Research recently detailed, hedge fund capital inflows are at a new record, with the total industry now managing $3.21 trillion in assets as of the end of 2017.
This growth is occurring in a context where, according to the Harvard Law School Forum on Corporate Governance and Financial Regulation, companies are devoting “considerable effort to creating and managing social media presences”. Before social media existed, companies publicized investor-related information including earnings announcements by sending press releases to newswire services. But with social media platforms, companies can now reach their audiences directly, particularly on Twitter, to reach their audiences in a cost and time efficient manner.
Social Media discussions about hedge funds expanding
But as Pepper Communications details in a blogpost, hedge funds have become hot topics on social media, while many funds have not yet adopted social media. Notably, Jacqueline Kolek, a Pepper Communications Partner explained that: “Every time hedge funds shy away from the social media conversation, they throw away important thought leadership and content opportunities for themselves and for the industry.”
What does an internet search reveal about your fund?
To adapt to the new social media environment, hedge funds should, as Pepper Communications details:
- Assess your presence on the internet. What does a Google search for your firm say about you? Is it resulting in what you’d like to see? Are you telling your own story – or are others?
- Begin to monitor online discussions about the hedge fund industry. “Identify who among your peers and target audience is active online”. If media, other hedge fund leaders, conference organizers and others of key importance to your industry are engaged online, determine where you might join this online conversation.
- Identify and determine how to comply with any internal or external protocols or regulatory standards related to any online presence you consider adopting.
How to effectively adopt a hedge fund social media presence
Don Steinbrugge of Agecroft Partners explains in Hedgeweek that because the industry is so competitive, having a well-thought out strategy to harness the internet will advantage funds that properly undertake a presence. Steinbrugge explains how an effective social media presence would help any hedge fund:
- Identify, Enhance Knowledge, and Screen Investors
- Improve probability of getting meetings with investors
- Connecting with industry contacts
- Posting information
- Following people’s careers
While LinkedIn and Twitter are key platforms hedge funds can use to achieve these goals, perhaps the most challenging but effective effort to distinguish a fund involves developing a thought leadership position in the industry, as Diane Harrison details in Hedge Fund Insight.
As Aden Andrus – writing in Disrupting Advertising detailed – his corporate thought leadership initiative produced significantly higher organic traffic and 32 times more organic lead volume – over a two-year period.
As the hedge fund industry continues to grow and become more competitive, hedge funds should at least consider the possibility of developing a well-planned social media initiative as a component of their efforts to distinguish themselves. While a social media presence is not essential for hedge funds — if properly designed and implemented — it could provide significant advantage.
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