£5
Issue .23
I N D U S T RY • L U X U RY • O P I N I O N
Editorial
E di tor's
Editor
Mark Hedley Deputy Editor
L et t e r
Jon Hawkins Sub Editors
Alistair MacQueen Richard Reed Staff Writer
Matt Huckle
Design Art DirEctor
Matthew Hasteley Senior Designer
Lucy Phillips Junior Designer
Ali Davidson Design INTERN
Bianca Stewart
Contributors Robert Bailey Simon de Burton Neil Davey Mansel Fletcher Jessica Furseth Anthony Payne Tobias Preis Duncan Madden Lizzie Rivera Robin Swithinbank Michael Teller Adam Whittaker
Advertising Sales Directors
Michael Berrett Lauren Neale Print Advertising
Will Preston, Will Taylor DRINKS & VENUES
Alex Watson
Printing Blackmore
Published by
Square Up Media 4 Tun Yard, Peardon Street London SW8 3HT +44 (0) 20 7819 9999 squareupmedia.com HEAD OF DIGITAL
I
f you hadn’t realised, the days of the hedge fund industry being able to hide in the shadows are well and truly over. Never before have the highs – and lows – of the industry been so clearly on display. Last month, the Sunday Times released its inaugural UK Hedge Fund Rich List. Previously a task considered too daunting to be worth the effort – mainly owing to funds’ labyrinthine structures – research company Hedge Forensics took on the challenge. It spent 18 months studying the accounts of more than 1,000 funds and, combined with the Sunday Times’s Phil Beresford, calculated who was really is bringing home the bacon. (Louis Bacon came in fourth, by the way). The results will be eye opening for some: the top ten hedgies in UK alone are worth £6.6bn. Of course, these figures paint a rather rosy picture of an industry which has, on average, underdelivered for the last five years. In the first half of this year, for example, fund managers underperformed the S&P, returning 2.3% versus the index’s 9.5%. If there’s one thing some of the industry is guilty of it’s charging fees for the masses which are based on the successes of the few. Something tells me those managers won’t be able to get away with it for much longer.
Mike Gluckman HEAD OF MARKETING & PR
Loren Penney MARKETING & EVENTS
Danielle Kent Head of Accounts
Steve Cole Accounts
Laura Otabor Claude Alabi
Tobias Preis With a PhD in Theoretical Physics under his belt, Preis is also a professor of Behavioural Science & Finance at Warwick Business School. He is founder and managing director of German propriety trading firm Artemis Capital Asset Management GmbH.
Anthony Payne Anthony Payne is a marketing and communications consultant with more than 25 years’ experience. Prior to founding Peregrine in 2003, he was MD of WPP-owned Hill & Knowlton Financial, a global financial communications firm.
JANCIS ROBINSON Wine critic and writer Jancis Robinson OBE was the first person outside the wine trade to become a Master of Wine in 1984. Since then she has kept busy providing advice for the Queen’s wine cellar, writing for the FT and her own site, jancisrobinson.com
Mark Hedley - Editor Mansel Fletcher
CEO
Tim Slee Chairman
Tom Kelly OBE
Tiny competition: Find the London taxi (below) hiding somewhere in the magazine. Email us with your answers to competition@squareupmedia.com. Terms & conditions apply.
△ Cover illustration by Robert M Ball
© Square Up Media Limited 2012. All rights reserved. No part of this magazine may be reproduced without the written permission of the publisher. All information contained in this magazine is, as far as we are aware, correct at the time of going to press. Square Up Media cannot accept responsibility for errors or inaccuracies in such information. If you submit unsolicited material to us, you automatically grant Square Up Media a licence to publish your submission in whole or in part in all editions of the magazine. All material is sent at your own risk and although every care is taken, neither Square Up Media nor its employees, agents or subcontractors shall be held liable resulting for loss or damage. Square Up Media endeavours to respect the intellectual property of the owners of copyrighted material reproduced herein. If you identify yourself as the copyright holder of material we have wrongly attributed, please contact the office.
Mr Porter features editor Mansel Fletcher has spent more than a decade – including a stint at Esquire – writing about men’s fashion, a subject that’s only loosely connected to life in the countryside, which he contemplates on p61. See mrporter.com
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Hedge
COlumn Brand Identity
S h o r t s
The Lay of The Brand Anthony Payne,
founder of hedge fund PR specialist Peregrine Communications, explains how the business has changed and why a firm’s individuality is its best asset
shorts
The last decade has seen many shifts in the public perception of hedge funds. In turn, the approaches to how hedge funds are marketed has had to adapt. There have been three major developments in the industry. First, communication has shifted from ‘narrowcast’ to ‘broadcast’. Ten years ago, hedge fund managers were marketing themselves to ‘friends and family’ or to funds of hedge funds. Some managers were also marketing via third party marketers, which themselves relied on personal relationships with a small group of investors. This is less the case, now; funds have had to cast their net far wider. Secondly, any trust in asset managers has for the large part evaporated. It is no longer sufficient to point to a performance track record and say ‘trust us that we can do that again’. Now investors need to understand how hedge fund managers plan to make their money. The ability to explain and educate is essential; transparency is the new watchword. Thirdly, managers not only have to be truly excellent, they need to be outstanding at communicating that excellence. ‘Branding’ and ‘positioning’ has become much more important as managers compete for assets. To me, a brand is that image, that feeling, that perception, that pops into the target’s mind when a firm’s – or fund’s – name is mentioned. Excellent communication is about managing these
22
Hedge
A subliminal lack of self-confidence has encouraged firms to try to belong to a ‘club’ rather than highlight their differences, their unique ‘edge’
perceptions on every level. It may seem obvious, but that perception should be about a firm’s investment ‘edge’, its differentiated advantage, so that it helps you ‘own’ a particular space. It is extremely rare that funds get this right. Most fund websites (and other marketing collateral) now look very homogenised, with similar colours, generic designs and bland descriptions. I think there are two things at work here: firstly, a subliminal lack of selfconfidence has encouraged firms to try to belong to a ‘club’ rather than highlight their differences, their unique ‘edge’; secondly, the person tasked with designing or writing the content often lacks the technical knowledge to successfully communicate that difference, and so dumbs down the content. Effective communication is also about breakthrough implementation. Essential to this is a coordinated approach, which means using all channels and media to communicate a powerful set of messages. Every aspect of the brand – in words, pictures and actions – must be relevant to its corporate DNA, creating its own distinction. Media, including social media communications, the website, the marketing pitch book, the RFP, the conference speech, the dinner party conversation, all need to communicate that edge. And even if the message is excellent, if the people who carry it are not coached, it can come unstuck. In order to represent hedge funds, Peregrine has recruited the marketing, technical, design, content and coaching skills needed for an integrated approach. We implemented a structure that organised our combined strengths and specialist skills around our clients, while developing a unique approach and methodology designed to communicate strong messages. We also invested in two major educational programmes highlighting the strengths of hedge funds. First is our Perergine Perspectives Panel series, run in conjunction with Imperial College Business School, where we put together academics, traders and consultants around a research topic. Then we’re working with AIMA on a major public education initiative. Roll on 2013, we’re excited! H