Saturday Spotlight: 10 tips for creating a perfect Hedge Fund Pitch
|December 5th, 2009||
|Contributed by: Lawrie Chandler, Alternative Decisions|
|In this week’s Saturday Spotlight, Alternative Decisions has provided some best practices on how to present and sell your hedge fund effectively. Marketing hedge funds requires some hard thought and brevity, here are some tips how you can improve your pitch together with some pitfalls to avoid. |
The 10 key marketing techniques to consider are:
1. The best place to start is to consider the main concepts that differentiate and represent you. This is sometimes called an elevator pitch – a short way to explain to someone what you do in the time it takes an elevator to reach the next level. In its simplest form this is about boiling your product or business down to its distinguishing features. For example don’t say ‘I run a long/short fund’, tell them you run EFG fund, a distressed bond fund.
2. The main tool in your briefcase will be a pitch book or corporate presentation. This is normally a maximum length between 15-20 pages. Anything more and no one will read all the pages, or if they do they will be swamped with details and left feeling unsure of your unique features. Quality of message and concise presentation is essential.
3. Include the essential basics but do not be bland. Every presentation will need to cover the 4 P's, attributes every asset allocators and fund selector requires. These are People, Process, Pedigree and Performance. Don’t believe prior performance or the complexity of your strategy will win you money alone. Product transparency and communication are as important these days. Explain your investment style, describe your philosophy and how you will execute your strategy. Pedigree is also about integrity. Biographical details on all members of the management and operational infrastructure are essential items to include. The trick is weaving the 4 P’s into your story rather than just populating a slide per P.
4. Keep the story fresh and tight otherwise you will lose your audience. Make it easy by presenting an outline and stick to it. An executive summary can precede the detailed information. Ensure you include information on the principals, fund methodology, how you research, risk management and portfolio construction. Leave secrecy to the old school, it is no longer acceptable with institutional investors.
5. Remember a pitch-book is a taster, so keep it short and sharp. If you are liked they will come back for more data. Be flexible and have modules you can add to your initial pitch.
6. Get a professional look and feel. It is so easy to loose the confidence of a prospective investor without a decent layout and style. Do not let great content be torpedoed by poor style. An identity can be developed easily and cost-effectively.
7. As funds and managers proliferated in the past gaining an identity got harder, however, these days’ investors and capital is more discerning so while an identity helps, openness and investor care is more important. Be willing to understand the investor’s needs and cater to them. Seek quality assets, rather than hot assets. Help investors by being open and working with them.
8. Know your prospect and tailor information to the audience. If you know your prospect is seeking a particular facet you are strong in tweak your pitch and turn up the volume on that element.
9. Don’t miss the obvious. Many pitch books and corporate presentations do not include contact details. Make it easy for investors to contact you. A quick trick is to put a name and email address on the footer of each page.
10. Remember the pitch book is only one of the materials you will need to attract investors. A well written due diligence questionnaire is imperative. You can see the other basic materials a toolkit should include here.
This article is intended to give you a guide. If you need more practical advice, a bespoke solution, or more information about Alternative Decisions, please click here.