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Hedge funds should approach marketing in four stages of fund development lifecycle – Merlin Securities

Wednesday, August 25, 2010
Opalesque Industry Update - Hedge fund managers should be tailoring their marketing strategies to address the needs of their investors, says a new paper by Merlin Securities, a New York based prime brokerage firm.

In a newly published white paper “ The Spectrum of Hedge Fund Investors and a Roadmap to Effective Marketing”, Merlin Securities advises of the four stages of fund development from launch through to major institutional investor fundraising, and the focus on different services and infrastructure capabilities a fund manager should have to meet the needs of the very different investors who will become part of your client base throughout your fund's lifecycle.

While pre-financial crisis many investment managers invested in infrastructure to build strong operational foundations expecting aum growth across the industry to continue at a strong pace, as AUM levels have declined, even as hedge fund performance has largely remained steady, many managers are facing business management challenges in addition to the expected challenges of portfolio management.

“Today’s climate necessitates difficult decisions both for the top and bottom lines.” Observe Ron Suber, John Quartararo and Patrick McCurdy, the papers authors. The trio looks at various investors into the hedge fund universe and how to best leverage their needs during the different phases of asset raising.

“Clearly the landscape has changed dramatically for hedge fund managers and the investment community over the past several years. And so, too have the investment approaches of each level of the spectrum changed. For hedge funds seeking to reach the next level of AUM, it is important to understand where the fund is in its lifecycle, which investors should be targeted and what each of those investors requires. Only then can a fund begin to organize its overall marketing strategy to meet the increasingly stringent investor requirements.”

The full paper “The Spectrum of Hedge Fund Investors and a Roadmap to Effective Marketing”, can be downloaded here: Source

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See our May-2010 articles:
Opalesque Exclusive: Merlin's seven values for hedge funds Source,
and
Opalesque Exclusive: Merlin issues a twelve-point guideline to hedge fund best practice Source

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