It’s tricky to raise assets in a crisis environment like this current global pandemic. 

Now, more than ever, you need to be strategic and express your value as a high-performing alternative investment manager. Your investors are going to look to you in times of uncertainty — be ready.

Investors aren’t looking for a straight sell from portfolio managers right now. They are looking for intellectual prowess, communication, and leadership to guide them through the current market turmoil. 

  • What is your edge? 
  • How are you guiding your current investors? 
  • How are you controlling risk? 
  • Are you prepared for the next market move? 
  • What trends or changes do you see in the markets? 
  • What actions will you take in portfolio allocation and strategy, given the different outcomes that are possible with the coronavirus?

7 Steps for Communicating During a Crisis

Here are the basics of crisis communications that hedge fund managers should be ready to deploy:

  1. Immediate response to incoming inquiries. Don’t wait to respond to that investor who is asking whether they should redeem their capital in your fund or hold on. Get on the phone immediately.
  2. Communicate weekly. Your investors want to hear from you. They want to know what you are seeing and how you are planning. They deserve to know, and a weekly newsletter and 1-hour Zoom meeting every two weeks will strengthen the confidence in your firm and the investors that believe in you.
  3. Take care of yourself. As we all know, the market volatility is creating whiplash for even the best of hedge funds. There’s nothing more important than bringing your best self to work every day. You won’t be able to communicate clearly and effectively without essential self-care.
  4. Adherence to Investment Policy Statements. Reaffirm your commitment to the investments and the strategy that launched your firm. Don’t let strategy drift creep into your trading. 
  5. Develop commentary. This step brings us back to the main point: demonstrate your intellectual prowess and communicate what you are doing with your investors. They want to hear your take on what’s happening. Return their trust with transparency.
  6. Understand clearing firm procedures. One bad trade can end up in a margin call, and you don’t ever ever want that to happen to you. Make sure risk models and levels are acceptable to your clearing firm, trade wisely, and communicate risk.
  7. Be a good example. Stay inside. Communicate how you’re protecting employees and your firm. Be there for your people and your investors.

Nobody can know for sure when a crisis is about to strike. Having a communication plan in place protects you, your firm, and your clients in the event of market instability. 

Need help building and executing your communications strategy? Get in touch with BSD and start today.