marketing investment funds

Marketing Investment Funds – Top Strategies You Must Try

By: Frank DePino | May 4, 2021

The process of bringing a hedge fund to the public is a lengthy process. 

This journey can last up to eighteen months for some funds. 

Fund managers put a lot of work into cultivating the right mix of funds into their products. 

Despite putting in so much work to craft their fund package, investment firms don’t place any focus on marketing their fund packages. 

Most large funds have a website but that site is nothing more than a page with their logo and a photo. 

Two-thirds have a LinkedIn presence but only ten are active posters. 

To get attention to your fund, you need to put a focus on marketing.

While there are matters of legal compliance you need to follow when marketing an investment fund, this should not deter you from putting together a strategy to market your fund to prospective clients. 

marketing investment fund tips

These are the top tactics you can utilize when marketing investment funds:

  1. Marketing efforts make you appear more trustworthy to prospective clients
  2. Your efforts will make you visible to more clients
  3. It increases the profile of your brand
  4. You Will Have An Advantage Over Your Competitors
  5. Use Social Media To Reach Potential Investors
  6. Use Market Data To Properly Target Customers
  7. Create Quality Content

1. Marketing efforts make you appear more trustworthy to prospective clients

Companies trying to market themselves are nothing new. Consumers get ads on Facebook and even in their email inboxes. 

Direct mailers are still an important part of outreach for some industries. 

It isn’t possible to go anywhere and not see someone marketing something to a group of people. With the amount of data that is now collected on people, companies can now target their ideal consumers. 

Imagine for a second what you would think of a company that didn’t invest any time or money into getting you to try their product.

Would you trust that company? 

What kind of impression would this make on you and how would this reflect on their brand image? 

A lack of marketing could make it look like you have something to hide. 

Forgoing marketing leaves a bad impression on potential customers. 

Making even the smallest investment in some type of marketing will help leave a good impression on potential customers and make you appear trustworthy. 

private equity customers

2. Your efforts will make you visible to more clients

Creating an investment fund is a great deal of work. 

It would be terrible for a firm to put all of this work into the development of a fund and then no one knows anything about it. 

Without a marketing plan, you reduce your chances that organic foot traffic will find your investment fund. 

A brand new fund needs to find new customers and a plan for selling itself to potential investors. 

Your marketing efforts will help future customers find you and your investment fund. Without putting work into a marketing plan, investors won’t know that your new fund exists. 

3. It increases the profile of your brand

No matter if you are a new player in the world of investment funds or you have been around for several years, having a marketing plan will boost your profile. 

The number of investment and mutual funds continues to increase each year. This means there is more competition for customers. 

When there is an influx into the market, it leaves less and less for existing brands. 

You have to do something that will set you apart and get your brand noticed. A solid marketing strategy will do just that. 

private equity branding

4. You Will Have An Advantage Over Your Competitors

As mentioned earlier, many investment funds have a website

But for many, that webpage is nothing more than a logo with little to no information about the company or the fund itself. 

Some funds have established a presence on LinkedIn, but post infrequently and engage with people on the network even less. 

If you add even a few smaller details to your website and engage in any type of marketing campaign, you will be doing more than most of your competitors. 

For many reasons, marketing is not used extensively in the world of investing. 

If you add a marketing strategy to your firm, this will give you an advantage over other investment funds. You will have visibility on the web that they don’t have. 

5. Use Social Media To Reach Potential Customers

As was mentioned in the point above, investment funds have made little to no investment in marketing of any kind. 

This would include social media marketing as well. 

Making any investment in this area will give you an advantage over most other investment funds. 

Whether companies want to recognize it or not, social media plays an outsized role in our daily lives. 

This includes any research people do on a wide variety of topics, including investment opportunities. 91% of adults online use internet search engines to find information on a chosen topic. 

Social media accounts will populate in those results. 

These results will make you more visible and more attractive to potential customers. 

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6. Use Data To Properly Target Customers

Data is like gold in the world of marketing. 

No one wants to invest the time and money into marketing efforts and get nothing in return.

And if you don’t hone your marketing efforts, that is exactly what you will be doing. 

Use data to craft your efforts directly into individuals who meet your ideal customer. 

If you don’t know who your ideal customer is, invest in research to see who is that ideal customer. 

Then you can target your efforts to areas that your ideal customer frequents. 

For example, it doesn’t make the most sense to use targeted ads for investment funds on a social media channel like Snapchat. 

The demographics don’t line up. It makes more sense to advertise on a channel like Facebook or sticking to targeted ads via Google. 

It saves money and gets you better results.  

content marketing private equity firms

7. Create Quality Content

Content is king on the internet

This is what keeps people coming back to your website. 

It is also what helps instill trust in your business and establish you as an authority on your chosen subject. 

The higher quality your content is, the more other writers on the web will share and link to your articles

All of this comes together to raise your profile, increase awareness of your brand and enhance your reputation. 

However, if you don’t create relevant content or what you share is riddled with inaccuracies, it will damage your reputation online. 

Make sure any content that you produce is of the highest quality. 

If you find that your in-house teams do not have the time to create content of that quality, don’t be shy about outsourcing this to a freelancer. 

It is more important that your content be quality than it is that it be produced by someone on your regular payroll.

alternative marketing techniques

Should You Market Different Funds In Different Ways?

Honestly, yes. 

Each investment fund was created with a specific goal in mind. Some were made for risk-averse people. Others are high-risk funds and wouldn’t be a good fit for your other clients. 

Each investment fund is highly different and isn’t the right fit for every investor. 

Since each fund is different, it stands to reason you can’t market it the same way. 

It’s just like if you were selling cosmetics. You wouldn’t market anti-aging eye cream to a 20-year-old; that isn’t your target market. 

Investment funds are the same way. 

You have to assess what type of investor this fund was created for and create your marketing to reach that particular investor. 

High-risk funds are great for people who have the time to recoup their money if the market takes a sizable dip. 

These wouldn’t be the best choice for someone only a few years away from retirement. 

When you look at things through that lens, it stands to reason that you would have to use different strategies for your varied investment funds.

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Potential Legal Challenges For Marketing Investment Funds

An investment fund is a very different product to market compared to virtually everything else. 

Unlike other products, there are legal considerations as well. 

In 2012 the JOBS Act was passed by Congress and it has had an impact on the marketing of investment funds

A portion of this law pertains to how to advertise your fund during this initial fundraising stage for your starting capital. Startup investors also have to self-certify their accreditation when becoming part of an initial offering. 

Rule 506(c) also pertains to advertising and marketing for investment funds. 

This rule pertains to the accreditation and verification process for any non-US investors into investment funds. 

This rule can pertain to high net worth US investors as well. 

Since there are other ways to verify funds and investors, less than 10% of funds rely on monies that were verified under Rule 506(c). 

Rule 506(C) and the JOBS Act have made some aspects of gathering startup funds more difficult. 

There has been an increase in fraudulent or deficient funds showing up in the marketplace. 

These less than reputable funds gain growth through the use of more traditional marketing methods like flyers and brochures.  

In September 2017, a risk alert was sent out showing what the most common problems were and which fund managers were the most likely to violate the rules and market these funds.

To correct some of these problems, the SEC had to offer additional guidance on what constitutes advertising and other styles of conversations in 2019.

If you are working with overseas clients, the EU has additional rules for fundraising and marketing that aren’t used in the US. Laws and rules in the EU are typically more stringent than in the United States.

 Even if you are part of a US-based company, you are still expected to follow the rules and regulations of EU nations when operating in these countries. 

marketing for private equity firms

Other Important Details To Consider When Marketing Investment Funds

Fund managers have been averse to marketing and advertising efforts. 

Some feel that advertising will draw attention they don’t want to their fund. 

If the profile of the investment fund becomes too high, then regulators may start asking questions. 

While this can be a valid concern, it shouldn’t be. Fund managers should welcome regulators because everything they do should be above board and legal. 

Investors should feel at ease if they see an investment fund engaged in advertising. This means that the fund is doing everything by the book and isn’t scared of regulators taking a closer look at their fund. 

The SEC has rules around what is considered a marketing activity and what is considered client communications. 

However, these rules continue to evolve as digital communications also evolve. 

Any activities conducted for marketing investment funds should be developed and carried out by agencies that are up to date on the rules. 

If you don’t follow the rules governing marketing and communications, you could face some serious penalties. 

Only use marketers who understand the difference. Failing to do so could cost you a considerable sum of money.

Just like with anything else, you will want to track your marketing efforts

Not everything you try will work and get you the results you need. 

But you won’t have any way of knowing this unless you track your campaign and your results. 

Once you have some data you will know where to target your efforts and any changes you need to make. You will also be able to see your ROI and other marketing data.

marketing investment funds tactics

Final Thoughts

Marketing investment funds are different from marketing other products. 

There are legal issues that one must consider which can vary based on the country you are working in. 

Also, many fund managers don’t use marketing to attract investors, so this area of marketing has a lot of grey areas. 

However, the lack of people who market in this field means it is wide open and the sky’s the limit. 

A marketer who understands the legal issues can attract a considerable amount of attention for their clients and help them grow and market their investment funds. 

By: Frank DePino

Frank DePino is Principal and Founder of Mediaboom. Since 2002, Frank has led Mediaboom’s award-winning staff of creative and technical professionals building the most effective marketing and advertising solutions for its clients.

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