In almost every industry, from retail to asset management, you’ll hear the term ‘CRM’ thrown around. But what is it, really, and how does it fit into the world of hedge funds?
In a nutshell, a CRM is a digital solution used to manage interactions and relationships with clients and prospects.
According to research conducted by CRM.ORG, 91% of companies with 10 or more employees use a CRM software. With these numbers, it’s easy to understand how CRM software in its various facets and industry applications has become an essential aspect of modern fund marketing and investor relations.
CRMs for hedge funds
Hedge fund managers rely on multiple platforms in their daily operations to engage with investors, track communications, and manage fundraising efforts. Maintaining consistent communication with clients and prospects often involves large volumes of manual data entry across disconnected systems. When information is scattered, critical details can fall through the cracks. This in turn creates inefficiencies, compliance risks, and leaves room for lost opportunities.
A purpose-built CRM for hedge funds is not merely a data store for contact details or communication logs. Unlike generic sales CRMs, hedge fund CRMs are designed to manage the unique operational and regulatory complexities of the investment management industry.
Key differentiators of a hedge fund-specific CRM include:
- Integrated compliance and (auditable) regulatory tracking to reduce manual oversight
- Centralised data accessibility
- Enhanced client servicing through detailed investor profiles and investor balance visibility
- Streamlined fundraising and pipeline management with real-time analytics
- The mitigation of key person risk through shared knowledge
- Robust data governance and information security
A hedge fund CRM is a relationship management tool, compliance framework, and an operational risk control mechanism combined into one.
For smaller and emerging hedge funds that operate on a restricted budget, implementing a CRM to support their sales and investor relations process is often not a priority. However, the result is the loss of valuable early-stage data. As a hedge fund manager entering the competitive fund marketing space, installing a CRM as early as possible can optimise your internal operations. If not, details of past activity – from calls with prospective clients to meetings with investors – can be entirely lost if not appropriately stored.
Be sure to check out our white paper “Selecting a hedge fund CRM” to learn more about this subject. Alternatively, check out Edgefolio for Managers, our CRM offering for fund managers – used by leading global hedge funds.