The day is finally here: The ban on hedge fund advertising has been lifted -- and the timing couldn't be better.
Although this new regulation was signed into law along with the rest of The JOBS act on April 5th of 2012, the SEC delayed submitting their final rules until July 10th, 2013. 60 days after the rules in the Federal Register, the hedge fund advertising industry will officially be born.
I've been writing about this new law for ages, and as an ad agency owner, I can say with absolutely certainty that the majority of the marketing world isn't fully aware (yet) of the scale of this gold rush. As a hedge fund analyst, I can also say with certainty that many hedge fund managers have been putting aside capital and waiting patiently for the new law to go into effect so they can start running ads.
Hedge fund managers -- especially those managing funds with less than one billion under management -- are especially excited about the new law because they will now have freedom of speech. The old regulations for funds were so strict that (technically) a hedge fund manager could not even say what he does for a living while in public, as it could be seen as a form of solicitation.
To add insult to injury, hedge fund managers with billions of dollars under management have always had the freedom to speak openly about their work in any forum and can even publish their performance results in financial publications. Why do the richest hedge fund managers have rights that the less wealthy managers do? Because the rules of the game are written to keep the big guys at the top. This new right of free speech for managers of smaller funds will go a long way to leveling the playing field.
But why did I say that the lifting of this ban couldn't have come at a better time? Well, I meant it couldn't come at a better time for me personally.
As my ad agency is now proficient in all of the relevant online marketing mediums (social media, search engine, display, content, etc.) and as I've worked for a hedge fund for several years now, there are few other advertisers in existence better prepared to begin cornering the new hedge fund ad industry. I've had multiple, complex campaigns created and ready to run for many months and I'm looking forward to sharing them with more hedge fund managers.
In the coming months, advertisers from all over the world will be struggling to come up with ideas on how to sell a product which hasn't been marketed for 80 years. I'm sure many funds will waste their money on things like billboards, TV / radio spots and an ungodly amount of mailers. Old fund managers will choose these methods only because they are the most familiar with them. However, the hedge fund managers who are more aware of the effectiveness of "new media" marketing tactics are already trying to learn as much as possible about the internet and social media before "the race" begins.
The Bottom Line
This new golden opportunity to advertise is going to result in heavy competition for clients in the marketing world and even heavier competition for investors in the hedge fund world. That is why I will leave members of those two groups with this advice:
If you're a marketer:
Now is the time for you to get educated about hedge funds and start thinking creatively about how to market them. I'll be happy to answer any questions you may have about this game-changing development and we can also discuss combining our resources and working together to attract and retain hedge fund clients.
If you're a hedge fund manager:
You should take advantage of the free consultations which are now available to you. Call (310) 734-8295 or send us an email by clicking here.