I love the secret world of hedge funds! Ever since I can remember I've been fascinated with the stock market, entrepreneurs, startups and trading. Unfortunately this isn't my business, I'm a social media agency owner not a Wall Street tycoon but that doesn't stop me from following hedge funds and what they are doing in my area of expertise.
Hedge Funds are on social media. Why? Hedge funds and other alternative investment funds are being challenged by the need to better brand, market, and communicate what really makes them different and interesting to investors.
What are they doing?
Many hedge funds are testing the waters when it comes to social media. Take a look at Aurum Funds, JP Morgan Asset Management and Fundrise. All of these firms are experimenting with social media in some capacity. For example, Fundrise has an established Twitter channel that they consistently use to highlight investments and industries on the rise. They careful about what they tweet an retweet since the JOBS (Jumpstart Our Business Startups) Act, which went into effect in September of 2013, lifted many of the bans on hedge fund advertising and private securities marketing to the public. These bans previously prevented hedge fund social media use for the fear that such information could be considered advertising. I like Fundrise’s approach and the fact that they are giving a clear message.
Citadel, a Chicago based hedge fund is making a lot of noise on social. The firm is on both Facebook and LinkedIn. On Twitter they have an account dedicated to careers within the firm. Citadel is even on Instagram, where they are engaging in some high level branding using imagery and video.
There are also a lot of notable hedge funds that aren't on social media: Elliott Management, Winston Group, Renaissance Technologies and AQR Capital Management to name a few.
I don't blame them… without a clear strategy for social media why would a hedge fund waste their time.
I witnessed this four years ago when banks decided to join the social media conversation. Once regulations eased around what they could and could not say on social media, banks started tweeting, posting and following anyone who would listen. There were positives and negatives to them joining social, some took on a lot of ridicule from the aftermath of the housing crisis, others spent time branding meaningless things like stadiums and marathons.
The end result was that many didn't have a clear strategy for what they wanted to do on social media. This lack of strategy caused potential customers to could care less about what they were putting on social media and ignore them completely.
You could say history is looking to repeat itself. My advice to the hedge funds contemplating social:
Define achievable goals. Social needs to be like any other companywide initiative. Have goals, and define how you will accomplish them.
Create a clear message. Don't salt and pepper your audience, have a clear social media message backed with interesting stories and advice.
Acknowledge dialogue. Investors love conversation, don't be one sided when it comes to social. Setup ‘advocates’ to answer questions and encourage open dialogue.
My overall advice is to have a strategy for social media especially in the world of hedge funds and investing. It's ok to have someone internally scheduling and posting but having a far reaching strategy designed by a social media agency working in conjunction with an internal person will speak volumes on social channels.
Follow me on Twitter @mikeylis and ask your questions on my Periscope chat Hedge Funds Social on Wednesday 8/9 at 10 am CST. Follow the hashtag #HedgeSocial for further conversation.