Long-known for secrecy and operating in the shadows of investment and finance, hedge funds will become increasingly transparent and more active on social media in 2015, according to Peppercomm.
“Secrecy is no longer going to work for many hedge funds,” says Thomas Walek, a pioneer in hedge fund communications strategies and head of Capital Markets and Financial Services at Peppercomm. Peppercomm’s award-winning team represents many leading hedge funds, emerging leaders and service providers in the $3 trillion global hedge fund industry.
“Intense competition for investors, traditional asset management firms moving into alternatives, and hedge funds launching mainstream liquid alternative products are compelling even the most tradition-bound hedge funds to take a fresh look at how they can strengthen their investor relations and business development through better communications. Today’s hedge funds are developing and implementing thought leadership and content strategies to reach institutional and retail investors, who increasingly are using digital media to find managers, research market experts and conduct due diligence.”
According to a recently published Peppercomm study on hedge fund communications, two–thirds of the largest hedge funds are on LinkedIn and 10 percent are on Twitter. Additionally, monthly hedge fund mentions on Twitter recently reached a high of 80,000 Tweets, and have not fallen below 40,000 in the last two years. The full research is available at http://www.peppercomm.com/JOBSAct.
In 2015, Peppercomm forecasts that social media use by hedge funds will grow, with more than three quarters of the largest hedge funds – up from two-thirds currently – establishing or improving their presence on LinkedIn and 20 percent (compared with 10 percent now) ramping up on Twitter. Related to this, Peppercomm sees hedge funds evolving into a mainstream topic on Twitter, with a projected 100,000 monthly mentions (up 25 percent from 2014’s record), driven primarily by activist managers, liquid alts providers and industry conferences.
To adapt to this new environment, Peppercomm recommends that hedge funds of all sizes examine their presence on digital and social media channels with these three steps:
• Assess your digital footprint. Does a Google search of your company and its executives reflect how you want key audiences to see you? Does a lack of publicly available material leave you susceptible to having your story told by others?
• Start listening. What are people saying on social media about the key issues you care about? Who among your peers and your target audiences are active online? How are journalists, analysts, academics, conference organizers and others using social media? And how can you keep up with that activity in real time?
• Compliance friendly. What internal protocols need to be established in order for your firm to become active on social media? How can a communications team and a compliance team work together to produce relevant, timely and insightful material that reflects how the company wants to be known—without bringing undue risk on the organization?
“Companies that have traditionally not prioritized public engagement are becoming aware that what people find online about them may not accurately or comprehensively reflect who they are,” says Sam Ford, Peppercomm Director of Audience Engagement and co-author of Spreadable Media: Creating Value and Meaning in a Networked Culture. “These trends will only continue to grow as hedge funds become aware of the significant potential impact their digital footprint has on their reputation and their business."
