When we talk about investing in hedge funds, we are basically referring to funds that guarantee a wider range of investments than other funds but it needs to be regulated by a particular type of investor (they may be pension funds, university endowments or individuals with high net-worth).
Hedge funds offer you good returns, therefore while investing in hedge funds you need to understand that you avoid any mistakes while choosing your hedge funds.
There are a few pointers for you to avoid making mistakes while you start with hedge fund investment.
- If you are looking for a short term investment in hedge funds, then you might not achieve good results. In order to invest in hedge funds, you need proper planning, build relationships and design high quality marketing strategies for a long term. It is advisable that you keep your capital invested for a period of 3-5 years or more for best returns.
- If you’re looking to build a good track record, you should probably outsource all your marketing instruments to a great third party marketing firm. This is because the third party marketing firms have links to hundreds of potential clients. But you need to avoid relying on to these third party firms for sustaining your capital on all occasions.
- While managing your funds, it is often noticed that investors/ fund managers present themselves highly professional and but do not give much ado to the matter or letter construction, or finding an impressive tag line or headline for themselves.
- While raising capitals to invest in hedge funds many firms do not dedicate many resources. In all circumstances, an industry should dedicate resources especially an internal marketing resource which works for 20hrs a week at a stretch at least. This enables the investor to search for good investment avenues and bring more reliability.
- When a hedge fund investment firm starts setting up conferences with their closest competitors, they might end up generating ideas that might not prove worthwhile to high end investors which seek refuge to these firms.
- While dealing with top investors, it is always advisable to build rapport and relate to them on the value of first name basis. However many firms tend to overlook this behaviour and lose out on the customer base.
- Many firms don’t regulate their funds marketing propaganda properly. This is because they do not create a philanthropic training environment for their team members. The trick lies in listing out the best practices and circulating it to the team members to follow.
- Firms usually miss out on the authoritative hold while trying to improve their own lineage within the hedge fund industry.
- Public relations are necessary in order to reach out to the customer base. But some firms ignore these PR firms.
- Most of the financial firms, or any business, for that matter, create an Unique Selling Proposition (USP) which might not always provide the firm with a strong foundation to achieve a customer base, until and unless they have done the right kind of marketing.