Update: Trends in Capital Introduction 2010

Here is the link to the published research report, Capital Introduction Trends in 2010, written by Daniel Golyanov at Carbon360.

Trends in 2010

I recently wrote an opening letter for the Carbon 360 survey on "Trends in Capital Introduction in 2010" and thought I would share it with you:

As the hedge fund industry stabilizes, we expect investors to become more active. 2010 should be a prosperous year for alternative investments. The managers and investors who survived 2008 and 2009 are the cream of the crop, providing third party marketers and capital introduction firms with a vast array of opportunity. As hedge funds go, so goes the capital introduction industry.

In that mode of thought, transparency and risk management are the popular trends. I would expect new regulations to affect how third party marketers and capital introduction teams are able to conduct business. But this change is not to be feared, but rather embraced. If we can work with regulators to legitimize the industry and overcome the scandalous actions of a select few, I am all for it. This will be a major theme ongoing.

I expect institutional investors to be more receptive to newer managers, fee structures to remain stable, and foreign investors to invest more in the US and vice versa. Europe should lose market share to Asia, and new markets will open up as countries move from developing markets to developed markets. Proprietary trading and hedge funds owned by large US banks will most likely weaken or disappear under the current administration and, more importantly, current US economy sentiment, leading to opportunities for independent investment management companies. Overall, I expect 2010 to build on the strength of the latter half of 2009.

If you have a chance to check out the survey, please do. The respondents include third party marketers, internal marketers, and capital introduction teams.

Third Party Marketing Survey

HedgeCo and Carbon 360 have teamed up for the Trends in Capital Introduction Report 2010 Edition, and right now we need your help. If you are a third party marketer or work in capital introduction, please take the time to fill out this brief survey. The report will be free for anybody who participates in the survey. Thank you for your time.

Evan Rapoport Presents the HedgeCo Fall 2009 Capital Introduction Round Tables

By: Alex Thompson

Evan Rapoport, co-founder and managing partner of HedgeCo.Net, is holding a capital introduction event Tuesday, November 10th at the US Trust Building in Midtown Manhattan. He will be present six different fund managers including Doug Cass to investors composed of some of the largest fund of funds, family offices, and high net worth investors. While seating is limited, there are still a few spots left. If you would like to attend and are an accredited investor, please click here to register for the event

Web 2.0 and Your Hedge Fund

Part 4: Social Networking

Without question, social media has experienced a meteoric rise in popularity over the past few years. In fact, most hedge fund managers and/or their staff have some sort of social networking presence on sites such as Facebook, Twitter, LinkedIn, and MySpace. While these sites offer a tremendous opportunity to connect with colleagues and build relationships, their use also carries with it a hidden risk. Most notably, given the easy accessibility of such information, investors are increasingly scrutinizing the pages of firms' key employees during the due diligence process. As a result, you would be wise to follow a few simple precautions.

First, bear in mind that anything you or your employee posts on their page will be viewed by fellow professionals. For example, posting a funny profile picture on your page may be funny to you, but to the potential investor conducting due diligence, it may mean something else. That same rule applies to any quotes, links, photos, or messages you post on your page as well. A good rule of thumb: If that if a given picture or quote isn't appropriate to share around the office, it's probably not appropriate to post on the web.

Perhaps the most popular site for professional networking is LinkedIn. For the hedge fund manager, the site offers several advantages. With relative ease, you can list your contact information and job description, not to mention any projects you are currently working on. Perhaps more importantly, you can network with potential investors and pre-qualify them. Your online acquaintances potentially meet the definition for the pre-existing relationship rule. Point being, this online network offers the similar benefits as more expensive alternatives, such as hedge fund conferences, but at little or no cost.

As I mentioned above, social networking can serve as a powerful marketing tool to highlight not only your own expertise, but also your fund's. Furthermore, given the breadth of marketing restrictions placed on the hedge fund industry, you would be wise to consider utilizing social networking to increase your fund's exposure. The results just might surprise you!

Doug Kass to Speak at HedgeCo Event

By: Alex Thompson

On November 10th, Doug Kass will be the keynote speaker for the HedgeCo Fall 2009 Capital Introduction Round Tables. In case you have been living under a rock, Doug Kass has been almost clairvoyant in his recent prediction about the financial meltdown, including his accurate call on the generational market bottom.

His uncanny knack for forecasting broad based market movements has brought him recognition, and he is a frequent guest on CNBC's Squawk Box, The Kudlow Report, Mad Money, Street Signs, and Fast Money. He is the author of The Edge on the TheStreet.com's Real Money, and has written several stories and editorials for Barron's.

Doug Kass is one of the foremost experts on short selling in the financial markets and has lectured on the topic at Yale University's Graduate School of Management, Harvard Business School, and Seton Hall University. He has also been quoted in the Wall Street Journal, the New York Times, and the Financial Times.

Doug Kass is also the manager of a very successful hedge fund. Based on fundamental analysis, the fund uses logical argument and analytical dissection as a basis for forming its trading position.

As an added bonus, investors will get the chance to speak with a handful of hedge fund managers and learn more about the strategies behind successful investing.

HedgeCo is a leading provider of hedge fund information and services, providing startup consulting, website creation, third party administration, capital introduction, third party marketing, as well as, providing and maintaining HedgeCo.Net, one of the world's most trafficked databases.

The event will take place at the US Trust Building, 114 W. 47th Street, in New York City on November 10th, 2009 at 4:30 PM. This event is for accredited investors only. To reserve your spot, please click here to be redirected to the event page.

Web 2.0 and Your Hedge Fund

Part 3: Blogging

First off, I realize the irony involved in writing a blog about blogging. After all, you could say that all I am doing is simply “tooting my own horn.” However, given the blogging universe's meteoric rise in popularity over the past several years, it has proven, when used properly, to be a tremendous marketing tool.

By writing about topics that you are not only well-versed, but also opinionated on, you can attract a very large audience. One of the great things about blogging is that it offers readers an alternative viewpoint to the current stream of traditional, often like-minded news outlets. In a sense, it can offer the reader a glimpse into the mind and personality behind your hedge fund.

In addition, blogs can reach a wide scope of readers. Blogs are syndicated, appearing on many users' home pages when they log on to their Google or Yahoo accounts. Other popular blogs, such as Abnormal Returns and The Big Picture, attract readers by reposting their favorite blogs and news articles to their readers. This type of exposure is priceless and very difficult for a hedge fund manager to ordinarily obtain. This pool of readers very well could include a list of potential future investors.

However, before you race to launch your own blog, there is one important aspect of blogging that I need to address: compliance. First, and perhaps most important, you are not allowed to mention the specific name of your fund in any blog accessible by the general public, but it is perfectly fine to discuss topics related to the markets, politics, or opinion-related matters (in fact, it's encouraged!). For example, you are not allowed to say, “I believe the S&P is overvalued, and as such the Hot Fund LP will be shorting the market with our long/short hedge fund.” In contrast, if you said, “ I believe the S&P is overvalued, and as such I would consider lightening up on equity holdings and seek ways to generate more cash,” you would be compliant with regulations, as this is not a general solicitation. Also, make sure that you check with the investment advisor rules in your state prior to providing any specific portfolio advice to investors.

That being said, in my opinion the best way to promote your fund is by either referencing your general partnership and/or directing readers to your compliant, password-protected web site. A simple suggestion would be to post a link to your hedge fund website below your blog, along with a short bio or description of yourself.

As you are undoubtedly aware, the blogosphere has grown at a voracious pace in recent years. As such, it presents a great medium for fund managers to spread their views and thoughts to a wider audience. Not only can blogging provide the public with a glimpse into an industry known for its secretiveness, but it can also offer another personal, human way to connect with potential investors.

Here are a couple of links to blogs run by hedge fund managers.

The Mystery Hedgie

The Mad Hedge Fund Trader (Former Hedge Fund Manager)

Bret Rosenthal of Rosenthal Capital Management