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Alternative Funds Face Communications Imperative

Max Hilton

Peregrine USA

2 February 2015

Max Hilton, director at public relations firm , more than double the amount for 2010, according to Morningstar) is rewarding those managers who have managed to differentiate themselves by successfully building a brand. Indeed, in a report into launching a ’40 Act fund, SEI Investments observed: “No manager hoping to break into the market will succeed without a strong brand strategy.”

An integral part of such a strategy is controlling risk. Since alternative fund investment strategies are generally less well understood, managers are more prone to media criticism. Being more prone to negative headlines increases the stakes and underscores the need to manage communications and build a reputable brand. Put simply, uncontrolled communications are unacceptably high risk. Therefore, a systematic and controlled content strategy is critical.


Becoming a communicator

The first step for an alternative fund manager is to formulate its key performance, compliance and communicative differentiators. The medium for this is on-message placed content, which bypasses the traditional media process and allows for tighter control of the outcome. As we have seen, the availability of digital channels to deliver this content to the marketplace has grown exponentially in recent years.

A single piece of expertly defined educational content is amplified across all key communication channels: from the fund manager’s website to being disseminated through graphically sophisticated email marketing software. Further distribution can go through key online channels (LinkedIn, Google+ and Twitter, for example) with the potential to be supported by a related event, manager video and a highly-targeted digital advertising campaign.

The amplification through this "waterfall" effect engages and calls to action far more target investors than one sole communications channel. Crucially, this placed content should not be based on performance, which as we know is variable, but rather on the firm’s best original thinking that demonstrates its thought leadership. The aim is to position an alternative investment manager as a "solutions provider" rather than a "product pusher". Building a relationship with investors in this way will help to turn a first meeting into a second meeting.

Getting the right communications partner

The importance of an effective marketing communications partner in delivering a content strategy is critical. A skilled agency is capable of creating highly messaged, impactful and relevant content that engages a manager’s target audience. The ideal partner will also have the in-house technical knowledge to create powerful educational content with minimal input from the manager. Equally crucial is the communication partner’s ability to push this content across every available channel, dominating the all-important Google profile (now the greatest newspaper in the world) which is an investor’s first port of call in doing manager research.

To be among the elite group of alternative investment managers leading fundamental change in the industry, it’s now vital for managers to have an effective integrated marketing communications strategy. A key component of this is rigorously planned and effectively executed thought leadership. Proactive managers have the opportunity to increase both the quality and quantity of their assets under management.

Communicating really is no longer an option.