When hedge funds consider PR, one of the first questions they often ask is should they actually put their head above the parapet? In other words, do the risks of negative coverage by engaging with the media outweigh the benefits? My answer to this question is simple – there is no parapet and the concept that you can nowadays choose to avoid media coverage is unrealistic. Your investment updates, performance and issues such as portfolio managers leaving can be picked up and written about whether you like it or not. However, if you just view the media in these terms, you’re also missing out on the significant opportunities that quality media coverage can provide in building corporate reputation, bringing potential and existing investors up to speed on latest news and successes, and positioning investment talent as leading thinkers at the forefront of the industry. This in turn creates a favourable environment to win and retain assets.

Since the advent of the financial crisis, hedge funds have taken significant steps to institutionalise their businesses and bring in more robust infrastructure and risk management. In an increasingly institutionalised world, the media does have a part to play and many hedge funds are now also re-examining best practice in terms of how they position themselves and the channels they use to communicate with their target audiences.

Reaching the audience
If you look at how hedge funds communicate with their target audiences, it is generally on a one-to-few basis. A hedge fund’s sales and marketing activity is mostly centred around face to face meetings with clients or potential clients, often supported by participation in conferences or industry events.

While direct contact will always remain the most important channel, this approach on its own unfortunately suffers from an inherent weakness: investment talent’s time is not readily scalable. It’s always a balancing act – the more time managers devote to marketing, the less time they are able to spend running money, meaning that there is a point reached where time spent away from investment activity can damage performance. As a result, by focusing solely on one-to-few communication, the touchpoints managers have with their target audiences become limited. PR, however, can provide an effective solution. By engaging with the right media via quality, targeted PR, hedge funds have the opportunity to extend their communications efforts to one-to-many, complement their existing sales and marketing initiatives and increase the frequency of touchpoints with their target audience.