The first step a hedge fund is likely to take in seeking external marketing support is to enlist the services of a public relations agency, and rightly so, since influencing the influencers is crucial in reaching professional audiences. However, PR has changed with the rise of new media. Not only are our favourite industry newspapers and magazines increasingly consumed online, respected journalists and industry experts are talking directly to audiences via niche blogs promoted using sophisticated online marketing techniques. In order to ensure successful management of communication between the organisation and its audiences, there needs to be a clear understanding of new media and how to make use of the opportunities it creates

A recent survey of institutional analysts and investors by the Brunswick Group demonstrates the growing influence of independent online media on the investment decisions of institutional investors. The survey reports that 47% of respondents have read information on a blog that prompted them to investigate an issue further and 20% have made an investment decision or recommendation after initially sourcing information from a blog.  58% believe that new media will become increasingly important in helping them make investment decisions in the future.

Thomson Reuters, the world’s largest provider of financial news and information, believes that new media will play an increasingly important part in influencing financial services professionals in the future. Devin Wenig, chief executive of Thomson Reuters Markets Division, said that bloggers have “different rules and perspectives and can do things that we do not. Many professionals feel that both sources are relevant.” Wenig has acknowledged Reuters terminals as appearing “archaic” to the new generation of web literate financial professionals. “We are working on redefining the way financial information is presented and used” he told Hedge magazine.

While traditional PR agencies are incorporating online media as part of their offering, many are challenged in truly adapting to the new techniques required and more significantly to the philosophy behind new media. Like advertising, PR developed in the age of “push marketing”, seeking to persuade rather than to engage.  In new media, the audience answers back and often generates the conversation in the first place. Products, providers and information sources are discussed on forums as they might be in the pub, but here the conversations are recorded and shared for anyone visiting or searching to find later. While the most popular blogs may be generated by well-known industry specialists, also influential are the comments left on the blog post by the readers. You can no longer control information, but those hedge funds who move early to participate in the conversation can bring their influence to bear and benefit from the opportunity to engage with their audiences, to listen, to learn about needs and to adapt to meet them.

New Media PR goes deeper

New media is not only rapidly growing and gaining influence, it is also evolving requiring PR agencies to continuously adapt and place a new emphasis on technological competences.  Reputation management online has to begin with knowing what is being said where, using advanced search techniques and tools that can not only root out what is served on Google’s main search pages, but that can look much deeper into online information. Whatever is said online remains online unless actively removed, and most blog managers will respond to a reasonable request for the removal of negative comments, but first you need to know the comments are there. Search is therefore not only a skill required to ensure your name and website are served high in search rankings, it also lies at the heart of reputation management.

Alternatives research specialists, Preqin, report that institutional investors are now the key source of capital to hedge fund managers and their confidence in hedge funds is returning after the global crisis of 2008. They are, however, becoming increasingly demanding and, along with liquidity, transparency is a key issue for both investors and their advisors.  If properly managed, new media provides the opportunity for hedge funds to use PR to do more than the mundane press release, to open up to comment and to reassure investors of their openness and transparency.