A majority of investors are not satisfied with the quality of information on hedge fund managers’ websites — and therein lies an opportunity for a competitive advantage for emerging managers, according to a recent survey of investors conducted by IR Halo.
One-hundred percent of responding investors said they use a hedge fund’s website to find information on a manager; however, few hedge funds see their websites as an investor relations tool.
That disconnect was one of the main takeaways of IR Halo’s 2016 Investor Relations Survey, which gathered responses from 109 investors and 126 fund managers.
From the report:
Fund managers need to invest in their websites, however. Investors are not at all happy with the quality of fund managers’ web presence, leading one investor to comment: “A Google search and a website visit are the first two things done when hearing from a new manager. If there is no website, or it’s not informative, [the manager] needs to work much harder to keep my interest”.
All 109 investors who participated in the survey said they use a manager’s website as a source of information.
But a “minority” of hedge funds actively use their websites as an IR tool, according to the report. That disconnect is reflected in investors’ dissatisfaction with fund websites:
Most importantly, all investors (100%) who responded to this survey said they used hedge fund managers’ websites as a source of information. Investors were also asked to judge hedge fund managers’ websites by both usefulness and content. None were able to proclaim themselves even ‘Somewhat Satisfied’. They were most critical on the overall usefulness of fund managers’ websites – a striking 66% of allocators said they were ‘Very Dissatisfied’ in this respect.
Of course, in the middle of difficulty lies opportunity.
Stellar websites, according to the report, offer an opportunity for emerging managers to gain a competitive advantage:
Certainly, an opportunity exists for smaller and / or growing funds to improve their competitiveness via an enhanced IR function. With most investor relations being undertaken on a part time basis or by only one individual, it seems critical that hedge funds address the operational issues this presents – e.g. the lack of updates to investor materials.
The entire report is worth reading, and offers several more key insights into the minds of hedge fund investors, managers and service providers. Find it here.