JOBS Act changing hedge fund communications, says study
Hedge funds are beginning to take advantage of new communications channels one year after the enactment of the JOBS Act, according to a Peppercomm study.
"The JOBS Act is working by removing grey areas surrounding hedge fund communications and enabling more active engagement," says Thomas Walek, president of WalekPeppercomm, a communications firm serving the hedge fund sector. "This new regulatory environment is one piece of a larger trend as hedge funds explore new communications strategies and tools in response to intense competitive pressures, new products like liquid alternatives, and client demands for relationships built on more than performance numbers."
The Peppercomm study, titled "The JOBS Act at One Year: A Changing Hedge Fund Communications Landscape”, focuses on hedge fund communication trends in the first year following the implementation of the Jumpstart Our Businesses (JOBS) Act, which went into effect in September 2013.
The study used both quantitative and qualitative research to look at new ways that hedge funds are enhancing their relationships with investors and the media, including by building or expanding websites, launching social media accounts and engaging in advertising.
The study found that 66 per cent of 2014's largest 292 hedge funds are on LinkedIn, and 10 per cent are on Twitter. Of these, six hedge funds post on LinkedIn at least once a month and seven hedge funds Tweet at least 10 times a month.
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.
Among the largest 285 global hedge funds in 2013, 14 per cent launched websites in 2014.
Among the 185 global hedge funds with USD1 billion to USD5 billion in assets, 23 per cent had websites in 2013. By June of 2014, an additional 39 funds launched websites and 11 more moved from a closed site to a more open site.
Media mentions of hedge funds are projected to reach record levels above 100,000 in 2014, up nearly five-fold over the last decade.
Advertising by hedge funds has been nearly non-existent. However, some traditional asset management firms and intermediaries are actively touting their alternative investment solutions and expertise via paid advertising.