Enhancing and Restoring Safety & Quality Cultures - Dave Litwiller - May 2024...
Hedge Fund Business Development
1. Market Saturation > Branding & Reputation > Multiple Touch Points
HEDGE FUND BUSINESS DEVELOPMENT
2. INDUSTRY MATURATION AND CONCENTRATION
“The flow of capital into established fund management groups
has created the mega-fund managers that we now see today,”
Amy Bensted, head of hedge fund products at Preqin (May 2013)
“…hedge fund executives, once more at home discussing their
performance in private clubs and at high society events, are
having to adjust to a new reality, where they are competing
with larger money management firms like Blackstone and
Fidelity.
New York Times (Feb. 2014)
3. “BRANDS” TAKING HOLD
“We find that a superior brand generates persistent flows. This
is not the case for funds with an inferior brand.”
Jan Jaap Hazenberg et al
The Lure of the Brand: Evidence from the European Mutual Fund Industry (2013)
“Firms with greater perceived than actual performance
secured a sizable amount of business from U.S. institutional
investors.”
Casey, Quirk & Co., The Complete Firm 2013: Competing for the 21st Century Investor
(2013)
5. Sales
Buy Now Buy Later
Direct
Contact
Indirect
Contact
Marketing
Investor Relations
Education & Content
REVISITING “BUSINESS DEVELOPMENT”
6. Promotional Content
(“Buy Now”)
Non-Promotional Content
(“Buy Later”)
Mass
Communication
Direct
Communication
Free Media
Advertising
Awards
Philanthropy
Industry
Initiatives
Marketing
Collateral
External
Conferences
Client
Conferences
White
Papers
Advertorials
Podcasts
Social Media
Website
Proprietary
Pubs. And
Newsletters
Video
CRM
Systems &
Processes
Term Sheets
PowerPoint /
DDQ
Sales
Meetings
Email
Campaigns
Manager
Letters
Meeting or
Pres’n.from
Expert
Content
Marketing
New Media
Creative
Direct Sales
Sales Lead
Research
Events
PR
Legend
Webcasts
7. BAKING CONTENT INTO EVERY TOUCH POINT
Strategic
Asset
Core
Competency
Strategic
Asset
Strategic
Asset
Strategic
Asset
Core
Competency
Core
Competency
Core
Competency
Unique, sustainable, strategic differentiators…
Education & Content
Drives unique design to all touch points…
Free Media
Advertising
Awards
Philanthropy
Industry
Initiatives
Marketing
Collateral
External
Conferences
Client
Conferences
White Papers
Advertorials Podcasts
Social Media
Website
Proprietary
Publications &
Newsletters
Video
CRM Systems
& Processes
Term Sheets
PowerPoint /
DDQ
Sales
Meetings
Email
Campaigns
Manager
Letters
Meeting or
Pres’n.from
Expert
Sales Lead
Research
Webcasts
8. HEDGE FUND BUSINESS DEVELOPMENT 2.0:
BRANDING ACROSS ALL TOUCH POINTS
Sales
Staff
Events
Coordinator
PR
Agency
Creative (Ad)
Agency
New Media
Manager
Content
Developer
Lead Research
One-on-one meetings
Direct email & phone
CRM Systems
DDQs & RFPs
Conference attendance
& sponsorships
Client-only conferences
Selection of conference
& sponsorships
Client conference calls
Media placements &
mentions
Industry awards
Philanthropic activities
Industry associations
and initiatives
Collateral Design
PPT Design
Website Design
Advertising
Promotional Video
Proprietary publications
Design
Social Media
Website
Podcasts & Webinars
White papers
Advertorials and articles
Manager letters
Conference
presentations (external
conferences)
Proprietary publications
(magazines, blogs etc.)
Unlike third party marketing activities, these
business functions can be outsourced without losing
control of message, client relationships, or the firm’s
brand equity.
9. DÉJÀ VU?
“…repeat business and referrals used to be sufficient by
themselves to attract new clients and grow revenue…”
Mike Schultz and John Doerr,
co-authors of Professional Services Marketing: How the Best Firms Build Premier
Brands, Thriving Lead Generation Engines, and Cultures of Business Development
Success
“During the early days, lawyers and accountants looked
askance at marketing and marketers.”
Bruce Marcus, author of Professional Services Marketing 3.0
Editor's Notes
Global ARC is an educational provider.But it’s also a marketing tool for hedge funds.Our clients are principals and heads of marketing at hedge funds.So we see what business development tactics are being used beyond conferences.We’re seeing a lot of changes among US and European funds.I want to tell you about some of them and propose a model to make sense of them.I used to be a management consultant and head of business development at a hedge fund. …So let me put on my management consultant’s hat to describe the business development process for hedge funds.
First, we all know that competition from large players is becoming more difficult.This is typical for any new industry.We see competition from large HF players and competition from large non-HFs
Large players have “brands” – whether or not they are marketing geniuses. Many simply have first mover advantage.There is a perception that institutions are perfectly rationale and that all decisions are based on facts such as returns, risk, manager bios, risk management etc.But brands matter – even for institutional buyers.Sure, brand is built on facts, but can depart from facts too.
The marketing function can be an administrative process or a value-added process.Let me borrow the CAPM to explain.If you invest to generate investment alpha, why not invest to generate marketing alpha???
Okay – so that’s the business case to invest in business development.But marketing alpha is created in different ways.We all know “sales”Education and Content is now required due to competition and market saturation. This is our business at Global ARC – but it should also be your business.
This is where it gets interesting because our clients are beginning to look at the many new ways to interact with or “touch” their clients and prospects.The marketing field calls these tactics “touch points”. I’m about to list 2 dozen of them.In the hedge fund industry, you might arrange these touchpoints along a continuum from where the content being communicated is promotional in nature to where the content is non-promotional. NOTE: All touchpoints are promotional unless you are running a charity! I’m talking about the content itself contained in the touchpoint.Some touchpoints are “one to one” and some are “one to many”.They can grouped into 6 categories based on the business processes required to executive them.
Unfortunately, you can’t just go out and replicate the content of your competitors' touchpoints. They need to reflect your unique, sustainable, defensible competitive advantages – your assets and your competencies (collectively your “edge”)This edge must inform the touchpoints. Unique content is the foundation for all of these touchpoints.And THAT is why we are both in the same business! (Global ARC and you, the HF manager)
Your large competitors are doing all of these things – many internally.But you don’t have to do them all – and you can outsource them.In fact, it’d say it’s way better to retain sales and OUTSOURCE these business processes that it is to retain these processes internally and OUTSOURCE sales to a 3PM.
The hedge fund industry is a unique business – but not that unique!Until 1978, accounting and law firms in the US were barred from pubic solicitation. All business was direct and went right to the partner.A law suit in 1978 changed all that.Still, “marketing” was little more than cocktail parties and cold calls.It took until the mid 80s before the discipline of marketing took root…In the mid-90s at Ernst &Young, partners did all the marketing.NOW…
