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“This richard wilson and today. I m going to talk about hedge fund marketing and and capital. Raising best practices at a recent conference. I spoke on this topic and of the points.
I mentioned was the difference between a unique selling proposition and just what most people in the industry. See as just a selling proposition. Which is not unique in any way. And i didn t have any much time to speak about this at the conference.
I just wanted to go into this further here and send it to some of the attendees. But also just add it in here as a premium video resource for for anyone to do so to get started with let s go over to our mind map. Here. So you can see here.
I ve drawn out some of the structure of what we re gonna be talking about today at all centers around having a unique selling proposition for your fund. You know this website is focused on hedge funds. But it could be a cta fun mutual fund private equity fund. Very similar needs in terms of to finding a unique selling proposition.
So first let s talk about what a unique selling proposition is this is something about your firm. Which can usually be described in one to three sentences that truly makes it different from 95 of the other funds that you compete with for business. Usually. It s a combination of two or three different things.
But it s something that you won t see on other people s marketing materials. And something i ll make you stand out in the minds of investors in an important way. There s many ways to look different. But you want to look different in a way that s you know important to their core needs or the challenges they face while looking into funds.
So first of all whole reason. Why we re talking about this is that i get sent somewhere between 500 and 600 pieces of marking materials for hedge funds. Each year. And many investors see a multiple of that so.
When i see all of his marketing materials. All of them look the same after a while they all talk about a diversified fund a diversified portfolio capital appreciation goals protecting the portfolio not very many of them are unique and i think that s a big problem. I think. It s something that explains why so many funds have challenges raising money because if all of the funds.
Look the same dan. The investors are going to trust the ones that are you know have more of a brand or the ones. They re a little bit larger a lot of the time or the ones that their consultants. Recommend and a consultants.
Probably aren t going to recommend one that looks very generic and looks like twenty others that they ve seen in the past quarter. So anyways the selling proposition is what you don t want to have you might need to include information on being diversified or aiming for capital appreciation. But that should not be the thing that you try to promote as the thing that makes you different you have to go and dig deep dig further there probably is a great reason. Why i started your fund.
You have to find that and explain it within a professional way within your marketing materials in a very concise way. Usually the unique selling proposition is made up of three different things a combination of these three ingredients. The first is the team high pedigree team or very experienced team a team that s worked at funds in the past. A team that s raised a lot of capital and managed a lot of capital in the fat in the past those can be part of your unique selling proposition process.
The investment process that you use is a very close second to being the next. Most important thing after team your investment process typically needs to be very consistent. But also sophisticated if it s very simple then it looks like it could be easily copied or it looks like it wasn t very well thought out should be very exact rules and kind of decision tree rules within your investment process you know just naturally. Though should be here this isn t something you should add just for your marketing materials.
There s so many variables in most strategies that it really will pay off if you have your investment process. Thought out at a very granular level next. The third prong is usually research knowledge or some sort of insight advantage. Whether it s competitive research that you collect through a service or a subscription.
It may be intellectual knowledge from working in the industry for 20 years maybe. It s insights into regulation. I guess i m on your team used to work for the sec or used to work for a consulting firm that worked with compliance and it was important remember is that you don t have to have all three of these ingredients. But i hope this will help you start to brainstorm what combination of these three things are really gonna be your unique selling proposition for your fund.
I think this is one of the most important things you can do if you re looking to improve your marketing efforts because if you go out there and market to investors and you don t have a usp then it s gonna be hard to get their attention and the next time you call they might not even return your voicemail. They might remember who you are and not respond to your email. So you don t want to blow your chances you want to get this down at the beginning or as early as possible so now let s talk about some other ideas that can help you develop a unique selling proposition while most are made up of these three elements or at least two of these three elements over here team process or research knowledge and insight advantage. Here are some more ideas that can help you generate the usp offering more liquidity than your competitors can be a competitive advantage offering more transparency than your competitors to having a very diverse.
Very well experienced. And hopefully somewhat well known advisory board can go a long ways. Some rate name recognition for people who are known as authorities in the industry can be great. If you have those types of relationships.
Do whatever you can to try to get them on your advisory board higher stars. When you guys are looking at hiring professionals oftentimes from all the medium sized hedge funds have limited budgets. But i ve heard once before that i miss i miss hire can actually cost you 1 million dollars. And i believe and that was a statistic for private corporations.
Not hedge funds. It could be much much higher for a hedge fund and just remember your unique selling proposition when you re hiring professionals you know team is one of the 3 main ways that you can build your unique selling proposition. So think about that when you put together two job descriptions when you re interviewing professionals make sure there s someone who is really going to boost the pedigree of your team by hiring and hiring them next you could write a column in a newspaper write a book or speak at conferences. These are three ways to be an authoritative figure and if you choose the topics write for the column or the magazine correctly or if you write a book on a valid topic or speak at the right type of conference.
You can actually speak to a lot of your potential investors and you can reach thousands of them and they may end up contacting you instead of you having to contact them. Just like everything included within these resources. You always have to consult with your compliance advisor in house or an outside you know licensed attorney before you take any of these steps especially when it comes to speaking or writing a book or you know trying to get people to come towards you there are some advertising restrictions in the industry. But with any of this you know for making a major change in marketing materials.
You should always have it looked at by your compliance department. There s a thousand little disclosure rules and other things to consider while describing your investment process your returns and your team that s always better to be safe rather than sorry. Separate much wraps up our talked for today just to recap real quick. When you develop your unique selling proposition make sure it s unique don t you say if i diversified portfolio where you try to you know raise the assets of the value of assets.
And that portfolio. Because that s not unique the three prongs typically for developing a unique selling proposition. Our team process and research knowledge or insight. Advantage.
And then some of our unique ideas on developing a usp. Our liquidity. Offering more of it or more frequently more transparency. Having a strong advisory board.
Higher in stars writing. A column writing a book or speaking at conferences. So i hope these ideas help i know that many of the funds. I ve consulted with and spoke to conferences.
Thought this was a valuable idea. I ve never really been able to talk through it for any more than just one or two minutes during a speech. So hopefully. This is something valuable you can use within your business.
If you have any questions or feedback. Please do send the ” ..
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