In recent years the number of hedge funds has exploded, making it difficult for new fund managers to find an available name for their fledgling business. The crowded playing field underscores the important role a good name can play in distinguishing a new fund from the pack. The ever-present problem for every fund, getting in front of investors, leads some managers to break away from the crowd of water feature, geographical and Greek names and explore more creative angles on the name game.
Early on many managers don’t have much room for a marketing budget – a catch 22 situation. Restrictions on advertising in the industry present another roadblock. A good name is a valuable marketing tool that can do a great deal of legwork, generating the word of mouth a new fund needs.
Experienced fund managers emphasize the importance of talking about vision, strategy and goals from the start. A thoughtfully creative name goes a long way toward broadcasting vision in a concise message. Many investors are looking for the ‘next great thing’, particularly among the recent trend of niche and small boutique funds. An innovative name can bring attention, generate interest, make investors want to take a look. In the end, nothing substitutes for track record, analytical savvy, ability to detect breakaway opportunity and integrity in garnering investors’ confidence. But investors can’t look under the hood if they don’t know you exist. A good name can attract for a fund the curious eyeballs it craves.
There’s much to do in launching a fund – interviewing prime brokers, attorneys, accountants and administrators. Typically in the midst of this process, managers come up with a name, then another, then another, that are rejected by legal search as already in use. A frustrating process when managers should be focused on getting in front of investors, managing money, finding opportunities and growing the business, not finding an available name. Experienced fund managers counsel emerging managers to start out with a small team and outsource as much as possible; this should include the naming.
Perhaps the most interesting piece of advice from experienced managers? Early on, don’t hire an in-house Marketing Officer. A marketer can’t raise money. Managers need to raise capital and general performance; managers should send forth marketing when they have concrete performance to base these messages on. An innovative fund name at the outset is a valuable asset – it plays a vital role in early marketing when managers can’t, or don’t want, to do more.