A report on the state of the hedge fund industry by Barclays Capital has found hedge fund managers concentrating on building marketing and investor relations teams and increasing their investor communications.
The report, Raising the Game, was released by the firms Prime Services division, and was based on interviews with hedge fund managers whose funds manage a combined total of $387 billion of assets under management.
The main drive for improving investor relations came from smaller funds with less than $5 billion under management. These funds are looking to increase head count in their fund raising teams by 40% as competition heats up for new capital. Managers surveyed reported that assets are down 32% from peak levels. However manages saw $150 billion of inflows during the first nine months of the year.
Andrea Gentilini, Head of Strategic Consulting in the firms Prime Services division and author of the report, said, Raising the Game found that hedge fund managers are significantly more positive on the industry outlook, and having seen $150 billion of inflows in the first nine months of the year, they have good reason. However, Raising the Game has shown that the dramatic changes in the hedge fund landscape caused by the market dislocations have forced managers to be more strategic in their asset raising practices and brand management. Managers can no longer let returns sell themselves – todays investors want more communication, more due diligence and more transparency. Funds that focus on this have clearly been recognized by investors.