Hedge fund marketing is often seen as a one-to-one relationship management activity, and certainly that is an essential component. However, in any fund that is looking to grow, the role of fund marketing starts well before you get to first-name terms with a potential investor. It begins when they don’t even know of your fund, and much less plan to invest in it.
There is a natural transition here for most hedge funds. In the early days, the fund starts with the founders’ own money and investment from their close network – possibly even limited to their friends and family. No cold marketing emails needed, these trusted relationships were built organically and over long periods of time. However, as the fund matures, and returns indicate potential for growth, this method of fund marketing simply doesn’t scale. Your network only contains so many people who want to invest in your fund, so how do you expand your fundraising?
First, let’s remind ourselves of the fund marketing funnel.
The fund marketing funnel
As you widen your marketing reach to new and unknown contacts, you are focusing more effort on the stages which sit higher up the funnel. Potential investors that are not known to you personally cannot be targeted in the same way you approached your personal network; to just call and ask for investment won’t work. You need to drive awareness and build curiosity, and then to educate and persuade – at scale.
As your fund marketing goals shift, so too will the technologies you use. There are a few drivers for this:
- To support new activities, such as building and running a website, or producing and distributing a variety of marketing content.
- To ensure efficiency and control, as your operation targets more people.
- To offer assurance and convey credibility to prospective investors who have not heard of you before.
In our recent paper, “The modern fund marketing technology stack” we consider how different stages in a fund’s growth trajectory require different technologies for fund marketing. We discuss what a fund needs on day one, and the various opportunities technology presents as your fund looks to expand fundraising. Read the paper now.