So much can go wrong after identifying an interested investor and yet so much is out of the investor relations team’s control. Investors’ needs change, economic forces hit performance, senior management disrupts plans. But the fault is not always in our stars. Exploring manager actions and investor preferences, this section offers insights on some of the elements of marketing managers can and cannot control, with an eye on maximising the chance of converting interest into business.
All managers aspire to have a diverse investor mix, filled with the ‘best’ kinds of investor. But at what stage do managers take serious action to achieve this aim and which strategies do they employ? Investor base evolution is a topic that managers seldom discuss with their clients and is more widespread than many investors, and indeed managers, might suspect. Our final section explores this process, the extent of its implementation and the techniques used in doing so.
What are the best sources of new business? It is the question at the very heart of the marketing and investor relations function. Frustratingly, such sources are often moving targets. Yesterday’s new source of business is tomorrow’s crowded marketplace. As such, this section goes one step further: seeking not only to identify the most fruitful sources of new hedge fund business in 2018, but the factors that make these sources more and less useful to a given manager’s marketing strategy.
Having enjoyed something of a return to form last year, many hedge funds will be looking to 2018 armed with healthy performance data and a renewed sense of optimism. Of course, even the slickest investor relations professionals at the most impressive investment managers need accommodating market forces to be successful. What plans do hedge fund investors have this year and which markets and channels offer managers the best opportunities? These questions and more are answered in our opening section.
In some ways, the actions of crypto-fund managers could have as big an influence on the hedge fund industry as the brand-name quantitative firms developing AI and alternative data techniques. What ramifications could there be for traditional managers, for example, if a raft of investment funds launched by non-investment managers proves successful? This report’s third and final section will explore what these developments, and more, might mean for the future of hedge fund management. And in doing so, we embark on that most foolish of errands – a series of predictions.
Perhaps unsurprisingly, the uptake of disruptive technologies among hedge fund managers generally is not as widespread – yet – as media attention might suggest. After all, many managers are too busy concentrating on survival to make big investments in untested tech. That said, our research does suggest that a significant number of hedge fund firms are using alternative data methods and, to a lesser extent, AI/machine learning technologies. This next section looks at how they are using them and who – branded firms or otherwise – is behind the progress.
Such has been the proliferation of news stories and articles discussing alternative data, machine learning, and blockchain that one could be forgiven for thinking every hedge fund manager worth its salt was incorporating one or all these technologies into its business. No doubt many are, but how many? We start this report with an attempt to measure the scale of the uptake of disruptive technologies among hedge fund managers, shedding light on the types of firm behind the trends.