Top Hedge Funds Not Yet Engaged With Social Media For Brand Building

By Simon Kerr, Publisher of Hedge Fund Insight

When at last the SEC ruled in July that the 80-odd year old ban on general solicitation and advertising of private placements was lifted there was much prognostication on what that could mean for hedge funds. Already 40 Act Funds were being run by hedge fund management groups (and more have followed) allowing the mass affluent of the U.S.A. to access hedge fund strategies. A natural development of these two concepts together would be a host of new initiatives in marketing by hedge funds – public relations, advertising, below-the-line marketing spend, sponsorship, and expanded use of media.  Hedge Fund Insight has conducted its own research to find out how hedge funds have responded to the marketing opportunities – mostly brand building opportunities – over the second half of 2013.

The answers were rather disappointing.  So far there have been few publicly visible signs of change from the hedge fund management groups.

One of the areas that was seen by media folk to be ripe for exploitation was brand building by social media. So HFI has undertaken a survey of one medium – LinkedIn – to see how seriously the major hedge fund groups are taking social media engagement.  Hedge Fund Insight has visited the LinkedIn pages of the world’s 40 largest hedge fund management groups, and a sample of large groups outside the Top 40.

The first Table shows the level of engagement with social media (using LinkedIn as a proxy)  of the 20 largest hedge fund groups.

Table 1. Engagement of Top 20 Hedge Fund Groups with LinkedIn

source: Hedge Fund Insight

In the Table only six of the twenty hedge fund management groups have put any effort at all into developing their LinkedIn landing page. Five of the six use LinkedIn just to attract candidates for hiring. This leaves BlackRock as the sole member of the largest 20 hedge fund management groups with a developed LinkedIn presence.

BlackRock’s LinkedIn page (http://www.linkedin.com/company/blackrock) has a particularly good home page which is graphic rich and full of links. There are three tabs on it: home, careers and products. The careers tab is okay-to-good. The products tab has yet to be developed, but does show in which direction the firm is going with the site. The homepage content includes the BlackRock twitterfeed, comments on the twitterfeed content, and some infographics. In this survey, the LinkedIn page of Blackrock was the only one not narrowly focused on recruitment in its content.

So only one of the Top 20 hedge fund groups has gone beyond phase one of implementing a social media strategy using LinkedIn.

Looking further down the size ranking: the level of engagement with social media  of the next 20 largest hedge fund groups is shown in Table 2 below.

Table 2. Engagement of Next 20 Hedge Fund Groups (21-40) with LinkedIn

source: Hedge Fund Insight

Of the next 20 (after the 20 largest) hedge fund groups only one has a LinkedIn presence worthy of note.  It may not be a surprise that it is a company whose asset management business is just a part of a much larger financial entity – Goldman Sachs.  The GS LinkedIn  page is solely used for recruitment, but it is easily the best seen in this survey for variety and quality of content for recruitment.

Table 3. Engagement with LinkedIn of Sample of Hedge Fund Groups outside the Top 40

source: Hedge Fund Insight

Of the 22 hedge fund management companies given in Table 3, all outside the Top 40 for hedge fund AUM, only one  has a developed LinkedIn presence. The LinkedIn page for London’s CQS shows press articles on the group and/or its Chief Executive and Senior Investment Officer, the politically active Sir Michael Hintze.  CQS does not use LinkedIn as a teaser to attract potential employee interest or to promote its products.

The LinkedIn pages of companies generally (beyond the financial sector and hedge funds) are used for recruitment, because LinkedIn was set up to address personal networking and career interests. So it is consistent that the few hedge fund firms that use LinkedIn have developed their company pages for recruitment purposes.

It is very clear from the three Tables, wherein references to engaged firms are emboldened, that to date few hedge fund firms have engaged with LinkedIn as a serious business tool. There are several explanations for that state of affairs, not the least of which is that effective recruitment is done over several stages and can be done through many means. Introducing the firm and posting jobs that are available are probably best done on company websites and search firms’ websites respectively.

It could be that a whole media strategy has to be developed first, and that any use of LinkedIn will be a part of a broader initiative by hedge fund management groups to build brands through media engagement. We are only a few months after promotion of products has been allowed, and it is quite probable that even the most forward looking hedge fund executives are not yet implementing a brand building strategy.  That may come in 2014, and it will be interesting to see what marketing strategies are adopted by hedge fund management groups looking to extend their types of clients. But as at the end of 2013 it is too early to draw any firm conclusions about  where the marketing spend will be done by hedge funds, based on what has been done so far.