KCSA PUBLIC RELATIONS, INVESTOR RELATIONS BLOG
Posted by Lewis Goldberg on March 27th, 2013
Last year the federal government passed what could be a transformative piece of legislation known as the Jumpstart Our Business Act (or JOBS Act for short). This piece of legislation is intended to help small businesses grow dramatically by allowing them to access new capital from the markets.
This legislation also has potentially sweeping ramifications for the financial services industry. Hedge funds, private equity funds and other organizations that invest capital on behalf of high net worth individuals now have the ability to reach out to others of that ilk and to begin to market.
Until now hedge funds could not directly market to investors; and investors they actually could communicate with had to be accredited investors, people with more than $1 million in assets and making more than $200,000 annually. Under the new rules this all may change. More importantly, hedge funds and the like will be able to communicate through the mass media.
Now I can’t imagine that the BlackRocks of the world will be advertising on The Voice, but you will see a battle for mindshare targeting investors who buy ETFs or mutual funds. You’ll see fund managers on CNBC, FoxBusiness and CNN touting their strategies and their take on the markets.
The key question for financial services organizations in this new paradigm is: how do you effectively communicate and differentiate yourself from other hedge funds, from other private equity firms, in ways that go beyond just talking about return?
KCSA has made its name in working with money managers like Stanley Crouch from Aegis Capital, Forefront Capital, and others helping them use strategic communications to tell their stories to help them differentiate themselves and most importantly, to help increase assets under management.
The key element for any financial services firm to think about is how does the client want to be known and perceived when communicating with potential investors? How do they want to define themselves? How do they actually use strategic communications to recruit limited partners, investors and even employees?
People hire people, and while return is important, the people or PERSON who manages your money is key.
For the hedge funds, private equity funds and others that are looking at the JOBS Act as an opportunity to reach new investors, learning how to communicate about strategy, philosophy and culture is vital.
According to LXE Marketing, a partner firm to KCSA and an expert in marketing for hedge funds, there will be nearly $500 BILLION spent on marketing in the coming three to five years by hedge funds. LXE’s Steve Saltzstein believes that these funds will need to court potential investors in new ways, mixing in experiential marketing, public relations, social media and advertising. Spending this money wisely, and with a partner who understands the rules of the road, has a track record of being successful in helping clients increase AUM.