Hedge Funds Still Neglect Web and Social

August 2014

Google search results are increasingly a key data point for hedge fund evaluation.

Investors rely on the relevance of Google search as part of their due diligence process in evaluating hedge funds; service providers leverage search in their sales efforts targeting hedge funds, and hedge funds themselves use Google to inform their marketing strategy, collect investment research, and advance the overall quality of their firms credibility.

As part of its ongoing research into the niche verticals they serve, Zenna Consulting Group surveyed over 150 Hedge Funds with assets over $100m to better understand how this segment of the financial services sector is using online channels for marketing and communications efforts.  Here’s what they found:

Once notoriously private, hedge funds are now becoming more transparent in response to the harsh media attention now being devoted to this once stealth industry. As the scrutiny continues to increase, hedge funds have opted to unveil their identities and participate in the public marketing forum in hopes to curtail the traditionally clandestine nature of the industry. Recent FINRA regulations on social media use gave a nudge to firms who were contemplating launching websites and creating social media profiles; activities once thought of as a non-starter in the close-knit hedge fund community. While the volume is rising, the sophistication and utilization of these channels still shows that there is a still a great deal of room for growth.

In its research, ZCG discovered that 73% of hedge funds surveyed have some sort of web presence. However, only 58% of these websites feature little more than the perfunctory “contact us” and “investor login” pages and provide scant detailed information to visitors. Hence, only 42% of all hedge funds surveyed are effectively using their website as a marketing tool.

LinkedIn has historically provided a “comfort zone” social media platform for financial institutions, with the vast majority of financial firms having a moderate LinkedIn presence. This seems to be the case for hedge funds in particular.

ZCG research indicates that nearly 58% of all hedge funds surveyed have a LinkedIn company profile page. However, nearly half of these pages were set up automatically by LinkedIn’s auto-content generation software and had no true owned “authorship”. A properly created and optimized LinkedIn page typically includes a company logo, company history, number of employees, company mission and a link to the company website. However, “bot”-created profiles do not include this detail, and as such are essentially inert filler pages that provide little to no value to visitors.

Of the hedge funds surveyed, only 30% had a LinkedIn page that was authored and controlled by the company and contained all of the current company information. Even in these cases, it was common that a company employee -as a record of his/her personal work history – created the rest of the pages; seemingly not verified or enhanced by the firm itself.

According to the research, 11% of all hedge funds rely solely on their LinkedIn page to display their company’s information.

Of all hedge funds surveyed, only 22% had both a fully functioning website and an enhanced LinkedIn page.

Taking into consideration that Google is playing a larger role in the discovery and veracity of hedge fund corporate identity, and that a company’s corporate website and their LinkedIn page are typically the two first items that will appear in Google’s search results for a hedge fund, these channels are the two most valuable marketing and branding assets that hedge funds should be investing in.

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