Marketing Strategies for Hedge Funds: Onward and Upward!

Hedge fund assets set another high watermark in the third quarter with total capital under management reaching $2.51 trillion according to Hedge Fund Research, Inc. (HFR). Over $23 billion in new capital was added in the third quarter of this year, the highest since the second quarter of 2011. And while this might merit a cause for celebration among fund managers, where that new capital is actually going might not sit well for all those involved.


22 November 2013

Hedge fund assets set another high watermark in the third quarter with total capital under management reaching $2.51 trillion according to Hedge Fund Research, Inc. (HFR).  Over $23 billion in new capital was added in the third quarter of this year, the highest since the second quarter of 2011. And while this might merit a cause for celebration among fund managers, where that new capital is actually going might not sit well for all those involved. 

Following the general trend in recent years, the bulk of the capital under management was directed mostly to larger managers to the chagrin of smaller and mid-sized managers. In fact according to the HFR research, over 80% ($18.7 billion) of the $23 billion in new capital went to managers that already had over $5 billion in AUM, with smaller managers, those with less than $1 billion in AUM received 15.4% ($3.6 billion). Managers with AUM between $1 and $5 billion received a paltry 4.6% ($1.1 billion) of that total.

It’s clear that name recognition and ‘safety in numbers’ still drives a disproportionate amount of allocation decisions. What isn’t clear is what steps a fund manager can take to implement a marketing program that can draw the attention of the investor community.

My colleague, Holly Singer of HS Marketing, and I recently published an article in HFMWeek’s best practices issue which addresses the current state of hedge fund marketing and offers actionable strategies for fund managers of all sizes to help them get a bigger piece of the allocation pie.  For more information, please view the article titled Getting Fund Marketing Right.