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 Mad Hedge Fund Trader (Former Hedge Fund Manager)

1 comment:

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