My partner, Kyle Dunn, nearly convinced Sam Elliott’s agent to have Sam do the voice-over for a hedge fund video we produced. His resonant and recognizable voice was ideal to convey the message of an off-Wall Street, thoughtful and independent-minded manager.
Of course, we could have just written a marketing deck that says, “…we are an off-Wall Street, thoughtful and independent-minded manager” or more simply “we are unique thinkers that don’t follow the crowd” – but really, how is that different from a hundred (or even a thousand) other marketing decks?
It didn’t happen and we ended up using someone else, but when I mentioned it in conversation to industry colleagues, some of the feedback I received was even more interesting than the idea.
The best line was, “it might work for retail but for institutional investors that sounds like an act of desperation…”
As if “institutional” equates to emotionless and uninteresting.
Several years ago, I attended the SALT conference. It was there in a packed room that Rex Ryan, the luncheon guest, guaranteed a Super Bowl victory for the Jets. Tell me again what makes Rex Ryan “institutional”? Doesn’t really matter…did I mention, though, that the room was packed?
We constantly have managers tell us institutional investors are not swayed by marketing because serious people with serious money are above that. “This is about exclusivity…”
Arnold Palmer’s recent passing has reminded everyone of his tremendous legacy. One conclusion that can be drawn from that legacy is that when done right, those in the “exclusive class” can also be swayed by marketing (or in this case, advertising).
I say this because those are the exact people luxury companies like his clients, Rolex and Cadillac (at least, Cadillac when it was considered a luxury company), target when they spend chunks of money to develop their brands. And it has been the case for a really long time. According to Rolex magazine, Palmer became the company’s first official Golf ambassador back in 1967.
Sure, we can argue about regulations around solicitation of Reg D funds and the differences between advertising consumer products to the masses versus selective marketing to institutional investors. I understand that you cannot wear a hedge fund on your wrist – and if you could, you couldn’t do it publicly (unless you are a 506c fund – in which case, you could staple it to your forehead if you wanted).
The point is simply this: marketing matters.
And before you argue that Rolex is an aberration relative to other products targeting the one percenters, it may be worth noting that Leerjet advertises, Gucci advertises, Tiffany advertises…even Lamborghini advertises. Right – they are consumer companies….and advertising is not allowed for hedge funds.
But advertising is just one form of marketing. And big prestigious service firms do it, too. Did you happen to attend the Sullivan & Cromwell webinar last month or watch its senior chairman on CNBC earlier this summer? And speaking of prestigious service firms…any idea what Citi, Morgan Stanley, PwC, MetLife, Morgan Stanley all have in common? If you guessed that they are all PGA Tour sponsors, you would be correct.
These must be some seriously desperate companies!
The real question is, what industry doesn’t market aggressively? One reason hedge fund managers give me for not marketing is that it is simply not something that is done in our space. It is just not a generally accepted approach to raising awareness.
But ask yourself…isn’t that the exact reason you should do it?
By JD David