“It takes 20 years to build a reputation and five minutes to ruin it.” – Warren Buffett
The daily churn of ominous news stories surrounding the travails of SAC Capital Advisors has focused on the investigation and withdrawal of assets by jittery investors. But something else is being drained from SAC even faster than money – reputational capital. Replacing that will be a far greater challenge than finding new investors, according to Tom Walek, Founder of Walek & Associates.
From defining market position to managing media visibility, taking charge in crisis situations, supporting portfolio holdings, improving investor outreach, safekeeping reputations, and handling the needs of highly successful hedge fund executives, Walek & Associates has pioneered the design and execution of public relations campaigns to support hedge funds. Walek & Associates handles all aspects of integrated communications, including traditional media relations, crisis communications, deals and transactions, social media, SEO and web content and design.
“As we’ve seen countless times, across industries, reputation is the lifeblood of a brand. Faced with bet-the-company litigation, a company quickly finds out how sturdy its reputation is. Firms in the financial services industry are especially vulnerable to reputational exposure. Investment principal is typically the direct product of a lifetime of hard work by individuals and businesses.
“In today’s highly regulated financial services industry, the thoughtful cultivation of a brand is essential. Sustaining that brand through comprehensive, ongoing reputation management is job one. Hedge funds that find themselves in the cross-hairs of an investigation or highly public dispute aren’t just managing a crisis. They’re managing a reputation,” says Walek.
The advent of the JOBS Act in the US has brought reputation and its critical role in brand building into even sharper relief as we look at what’s ahead for hedge funds.
In a recent white paper entitled “Risk off: What Hedge Funds Need To Do About The JOBS Act,” Walek asserts that hedge fund managers must focus on understanding the JOBS Act, on what it allows, and get to work now formulating the best course of action to take in anticipation of these changes.
“Regardless of whether or how a firm responds to the JOBS Act, the industry itself will change in the months and years ahead. The essential role of reputation and its place in forging a sustainable brand will remain at the heart of this industry.”
Last year, Walek & Associates launched Walek Brand Asset, which Walek says is part of virtually every client and prospect strategy. “We have been advocating for and providing a brand-focused approach to marketing and communications among hedge fund managers for more than a decade. While performance, non-correlation, diversification, risk management and capital preservation are, and must remain, cornerstones of the industry, selling performance is not a viable long-term business strategy for hedge fund managers. Walek Brand Asset is the first of its kind in the industry and formalises our approach and our service offering.”
Walek notes that they are seeing product developments related to the new freedoms that the JOBS Act will allow: “We are seeing and managing communications around mergers and acquisitions throughout the asset management sector that are driven by the changing marketing environment for hedge funds, of which the JOBS Act is one element.”
Inevitably, the JOBS Act will open many doors for hedge fund managers, and as Walek asserts: “We will remain at the forefront of these developments.”