5 Steps to Creating a Stand-Out Fund Brand
There are an estimated 15,000 hedge funds globally. As Steve Cohen told the Milken Global Institute Conference: “there are too many players.”
Against a backdrop of fierce global competition, tighter regulatory controls and greater demands for transparency, a strong brand presence is no longer a nice-to-have, it’s a must have.
Over the years, we’ve worked with many hedge funds across the region. Typically, these are established players who want to increase their appeal to institutional investors by investing in fresh new investor materials or a stronger visual identity.
But what about the start-up funds, and those with more modest AUM levels?
In our view, fledgling funds shouldn’t wait until they’re a US$1Bn fund before investing in their visual identity. Rather they should make it a priority from the get-go.
But first, what do we mean by ‘brand’? Let’s start by summarising what a brand isn’t. A brand is not your logo, your products, your reputation or your fund managers. It’s also not your visual identity.
Rather, your brand is best described as the way your investors and stakeholders feel about what you do, and how you do it. It’s their overall perception of your fund.
Consider for a moment the firms you admire. What sets them apart? What makes them unique?
A firm’s logo, its products, people and visual identity all contribute to this perception. They’re what we call ‘touch-points’, and it’s how your audience collectively perceives all these touch-points that creates your brand.
Here are five good reasons why new hedge funds should invest in their brand.
- A STRONG BRAND SETS YOU APART
Increasingly, hedge funds need to create compelling reasons for why investors should choose them over others. In a crowded global marketplace with numerous funds offering similar investment strategies, new funds must quickly and clearly communicate their point of difference.
Investors want to be clear about what they’re buying into. So what’s your fund’s story?
When deciding where to allocate funds in a cluttered market, investors typically seek out funds with a clear and single-minded story. Having an attractive and distinctive visual identity will help you stand out from the crowd.
- A STRONG BRAND BUILDS CREDIBILITY
Hedge funds are increasingly at the mercy of investors who answer to trustees. This means funds need to engender confidence in investors – not only with consistently high returns and low draw-downs, but also through high-quality IR materials that project confidence and trust. To be credible, your messaging must be rich in substance and consistent in tone.
- A STRONG BRAND IS RELEVANT
Investing in your brand means identifying what sets you apart as a firm, but also clarifying the value you offer investors. For example: How can you meet their investment needs? What makes your firm and fund, the best investment opportunity among many potential alternatives? Clarity and relevancy of message are critical.
Create a visual identity that engages, inspires and educates. Inform investors about your fund’s key differentiators and unique vision.
- A STRONG BRAND IS TRANSPARENT
Regulatory change over the years such as the Dodd-Frank Wall Street Reforms in the US, and AIFMD in Europe mean that funds must operate with more transparency and exercise greater due diligence.
Such directives, coupled with an increasingly competitive landscape, mean that investors want to know everything they can about a fund – its investment strategy and risk controls, its team and its internal ethos and long-term vision.
In an age of always-on social media and 24/7 news cycles, funds are under ever more scrutiny. View tighter regulatory frameworks as an opportunity, rather than a threat, to strengthen your visual identity and brand perception.
- A STRONG BRAND ADDS VALUE
A brand that is distinctive, relevant, coherent and transparent is ultimately valued by external and internal audiences. Getting your branding right and delivering on what you promise will attract investors and talent alike. A strong brand reduces complexity and orientates your stakeholders. This is especially critical for start-ups and new hedge funds.
So how to develop a brand that stands for something, creates value for your stakeholders and helps your fund stand out in the eyes of investors?
While we can’t contribute to your product, people or processes, we can certainly help create a more impactful and compelling visual identity. Want to see how? Then contact hello@legato-asia.com