Richard Wilson says the following –
I truly believe that if you spend your time helping others get what they need and want the relationships you build will bring you what you need. In this spirit I’m offering the Hedge Fund Blog Book for free. To date, more than 125,000 professionals have downloaded and read this book.
Grab his free ebook here. Just be warned, it’s over 200 pages. So we’ve taken the liberty to summarize a few bullet points below.
- Chapter 1: Hedge Fund Careers
- Chapter 2: Hedge Fund Capital Raising
- Chapter 3: Hedge Fund Startup
- Chapter 4: Hedge Fund FAQ’s
- Chapter 5: Hedge Fund Marketing
- Chapter 6: Family Office Fundamentals
Chapter 1: Hedge Fund Careers
Hedge fund jobs
What is the perfect resume for a $1m/yr hedge fund job? There is no golden rule, but the following will help:
- An education, MBA etc
- Quantitative abilities
- Passion & humility
- Something extra, like PR or info
- Capital raising skills
Double Your Hedge Fund Compensation
- Where do you want to be in 5 years?
- Dream big and work back. Set goals.
- Friends hire friends. Make the right moves.
- Stop just putting in time & position your USP
- Draft a CV, incl. ROI & sample trades
- Invest in yourself, training, certificates, mentors
- Read at least ½hr daily in your niche
- Join toastmasters and be comfortable speaking as a leader
- Work hard
In life there are two groups: those who take credit, and those who do hard work. Be in the group that does the hard work; there is far less competition.
SKAR Development Formula
Specialized Knowledge + Authority Positioning + Tangible Results = huge growth opportunities and faster development in your career or business.
Specialized Knowledge. The difference between having specialized knowledge or not could mean the difference between spending 18 months to complete a task or project or being able to development strong client relationships and complete the same task in just 3 months. It lets you identify more opportunities, move more quickly on them.
- Read a specialized book a month
- Subscribe to 3 relevant newsletters (not just rehashed news)
- Write an article every week
Authority Positioning. Two professionals can hold the same knowledge, while one write 5 books and completes over 50 press interviews a year the other may be an arm chair critic with a small group of 5-7 consulting clients. Get your name our there.
- Publish your own newsletter / blog
- Interview a professional every month for same
- Take from blog & publish your 60-pg book on lulu.com
- Speak at conferences
Tangible Results. Cannot be overstated. Do this:
- Video or text testimonials
- Tips in your site that gives immediate benefit
- Add diverse & numerous case studies of your work
- Create & show a list of your clients
Form the right habits
Habits have been shown to form 96% of what we do every single day. We tend to eat the same things, walk the same way, watch the same shows, and read the same types of books. As the quote goes, “First, form your habits. Then, your habits form you.” So with SKAR, are you saying “I already know this”, or “Where can I improve?”
Hedge Fund Sales Careers
Want to get a salary as Marketing Director at a small (<$100m AUM) fund?
- They expect results quickly
- Ie bring in $5m in 6-9 months
- Or $10m in 1yr to 18 months
- Not commitments, money in the bank
4 Career Tips
- Become a CHP* (consider the source)
- Focus. Is your passion Sales & Marketing or Trading & Analytics?
- Always ethical. You are sharp. No need to cut corners.
- Do your own homework & due diligence on prospective employers
Networking Event Tips
- Don’t be shy – speak to everyone
- Don’t scare people off – be humble
- Get your name out there – biz cards
- Look & Act Professional – suit up Ted
- Have an Elevator Pitch – deliver essential info effortlessly
The Top 4 Best Hedge Fund Majors
What is the best major to complete in school to work in the hedge fund industry?
- Economics – understand valuations & trends
- Finance – analyze statements
- Marketing – huge demand for raising capital
- Programming – build models
Hedge Fund Salary Levels
What can you expect to earn? Data from here.
- Decent salary, but Bonuses are the stuff of legends.
- Entry-level analyst at a mid-fund $335,000 in 2013
- Portfolio manager at large fund $2.2 million in 2014
Third Party Hedge Fund Marketing
Common compensation for a third party marketing firm (3PM) is a retainer of 60k-150k (if they get one) and 20% of fees (usually commissions are 20% of both the base fee and performance fee). Common compensation for internal hedge fund sales people is 80k-200k with some making 400-800k/year and maybe 3-10 commissions that might trail off over time.
Chapter 2: Raising capital
Public Relations Management
- Most ignored
- Do more than just a quarterly client letter
- The media is hungry for real-time opinions
- Check with compliance what you may/not say
- List 10 targeted publications where you want to appear, call the editor and introduce yourself as a resource
- Speak at public events
- Consider writing a book
Writing a book sounds extreme if you already work 50 hours a week. Exactly why it would be so effective. Those who do have the time and skills to write well are often not the same as those who have the experience and insight.
- People won’t invest in what they don’t understand
- So teach them and make it easy
- Be transparent and open
- But don’t overwhelm your investors
4 ways to market your hedge funds in an educational or simpler way:
- Make ¼ of your PPT educational
- Folder, handout, summary, outside opinion
- Write & speak every week to build a presence & brand
- Smaller CFP’s & FSP’s typically speak to only a couple of funds a year. Get in there in build the relationship. Its much easier than with the $1bn+ groups.
What is holding you back?
Why are we not managing $100m?
Use the “4 Why Tool” (ask the same questing 4 times) to drill down deeper into the top 5 problems that you see your fund facing right now. Often times 3-5 problems will often be symptoms of a single root cause that can be directly addressed. Ask others including your advisory board, current investors, potential investors and coworkers what is holding your fund back. Do not settle with two word surface answers and try to identify what 3-5 action steps your fund could take this quarter to improve how you are positioned and address the #1 limiting factor in your business.
Hedge Fund Marketing Hurdles
Notably these two:Not enough time, staff, or interest from third party marketers who have an interest in marketing their type or hedge fund with their level of current AUM. Not enough checklists, training, internal processes, and best practices developed to make sure the fund marketing process is consistent and will eventually churn out new investor and sources of capital.
Email Marketing Best Practices
Invest time in increase your email effectiveness // Understand the important of copy ie the message // Use first name in the subject line, up open rate 30% // Headline must state benefit or be inviting // Professionals are more likely to respond to fear than benefit // Use a pro distribution service, just $10pm // They send 100k emails pm on Aweber // Use automated follow-up emails // Write 20 educational emails, ask leads & clients to opt-in & automate over 20 fortnights // Use stories & make it personal // Add your picture & signature.
Do NOT do this is you want to raise capital
- Outsource everything – you won’t learn anything.
- Blanket email shotgun – no-one likes spam.
- “Build it and they will come” – they won’t.
- Don’t just focus on track record – market every day.
Top 10 Hedge Fund Marketing Mistakes
From people who dealt with over 1600 hedge funds:A 3 month goal. Its too short to plan, relate & educate.
Just focus on track record. You need clients. Market.
Spend on graphic design & web but no SEO & interaction.
No resources for raising cash – you need CRM & IRM.
Speak in front of competitors iso potential investors.
Underestimate the value of first name basis relationships.
Not doing authority positioning & educational marketing.
Not having+acting on marketing plan. Can be internal.
Don’t write off PR. Use the media.
90% of funds just have the one boring USP.
Definition: The use of powerful and persuasive writing in marketing to get your prospect to action. The most powerful words in the entire human language: *You, *Money, *Results, *Save, *New, *Easy, *Love, *Discovery, *Health, *Proven, *Guarantee, *Free. Don’t overuse them, but keep in mind for Bios, Brochures, Email Subjects, Voicemails, Whitepapers, Handouts.
- Biggest concerns = Headline risk, Lack of transparency & Poor performance
- Consistent, stable & uncorrelated returns trumped high absolute returns
- Most start by looking at investment strategy rather than best performance
Top 4 Factors Institutional Investors Look For In Hedge Funds
- Reporting & Transparency (don’t invest if you don’t understand)
- Infrastructure & Operations (better managed firms have higher performance)
10 Hedge Fund Marketing Materials Tips
- Think long-term & create a institutional quality pitch book.
- Stress your team, investment process, and risk management.
- Show your USP. And make it unique.
- Your foundation is your team, processes & experience.
- Get signed-off by legal & compliance before sending out.
- Send your monthly mkt view: 1pg newsltter & 15pg PPT.
- Work with the best. Avoid skepticism with new fund.
- Use your whole team to improve your mkt’ing materials.
- Powerpoint presentation should be short. max 15pg.
- Use quality images and no © infringement.
Motivational Sales Quotes
The Harder I work the Luckier I get.
The key is not to call the decision maker. The key is to have the decision maker call you.
Master the web and you will master your universe – and your bank account.
When you begin to give value to the world, somehow the people you affect will find a way to tell you. Even if it takes a couple of years.
Writing is the key differential. It is the credibility you need to create buyer confidence.
Your job is to meet the right people and read the right books.
Every morning in Africa a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle — when the sun comes up, you had better be running.
xxx – p50
4 Types of Hedge Fund Investors
- The Follow Me – family & friends, go on recommendations
- The Send Me a Prospectus – sophisticated & verifies info
- The Investigator – wants to know everything, nuisance?
- The Independent – understand the risks & does their homework
Worthwhile creating marketing material fitting to each type…
Raising Capital with Tenacity
Why do salespeople fail?
- 44% quit after the first call
- 24% quit after the second call
- 14% quit after the third call
- 12% quit after the fourth call
So before the fifth call, 94% have already quit. And 60% of sales are only made after the fifth call. Get the picture? Keep going. Even if you leave 5x voicemails.
Cold Calling Tips and Advice
- Don’t ask ‘how are you doing?’. Rather do your homework.
- Create enough perceived value for them to talk to you.
- 30-80 calls a day. More is not always better. At least 10.
- Smile when you dial. People can sense your tone.
- Start at the top. Call the CEO. Let them forward it on.
- Set the table. Eat that frog. Take 20min to plan tomorrow.
- Prepare a standard email that you send out before the call –
- They need to know who you are & why you are calling –
- 3 sentences should be enough, send it 10min before the call.
How to Have a Positive Attitude
- What you think about you bring about
- Have motivational podcasts or audiobooks around
- Work out at least 4 times a week
- Read 15 pages of positiveness during breakfast (Jeff)
- What is important. Business Top 50 shower list. Read daily.
- Set BHAGS
- Learn from negative experiences
- Cut off communication with negative people
- Stop reading sensational news. Read only business news.
Hedge Fund Outsourcing Trend
Outsourcing their office space, operational, trading, accounting, IT, and compliance needs lets small hedge funds act more nimbly and simply deliver results instead of having each employee wear 4 hats. Now they can focus on trading and growing AUM.
Influence Through Orienting Reflex
We are influenced through our orienting reflex daily. This is when you adjust to something new. It makes first dates, roller coasters and travelling so exciting. When a fire alarm goes off, people stop and wait for instructions, watching others. It is at this very moment, while the audience is deciding what to do next, that they are most easily influenced.
This same rule applies to changes in stock market conditions and the reaction of Wall Street analysts and investment news broadcasters. If you can be the person to suggest a strategy or provide additional credible evidence when others are still orienting to a new environment you can be very influential very quickly.
How many future CEO’s have you reached out to, today?
Young? Thirtysomething? Working? HNW friends that will take over their family businesses? Get cracking. They are the future leaders and high earners. When the time is ready and they have the disposable investment income, make sure they come to you.
Hedge Fund Third Party Marketing Careers
If you can raise capital and consistently bring in $100m-$200M/year you can typically eliminate most types of political/corporate risks while earning 2-10x more than you would while working for a large institution such as Lehman Brothers or Goldman Sachs. And it is a safer bet when the economy goes through this rough patch where bonuses are skimmed and 50 year old executives laid off…
Being details oriented
You need to not only be cold calling but also writing, speaking, networking, creating unique marketing pieces, and providing value to others every day in 80 different ways. Many of the people I call receive over 150 emails and 50 phone calls every single business day. To be very successful you almost need a list of 100 ways to be proactively sales detail oriented or you will never rise above the noise.