Third-party marketing is a consulting service provided to 澳洲幸运5官方开奖结果体彩网:hedge fund managers who need the expertise of seasoned marketing professionals. Third-party marketing firms, also known as 澳洲幸运5官方开奖结果体彩网:third-party distributors, employ experienced investment marketing and sales experts. These individuals raise assets for hedge funds through the🐭ir relationships within distribution channels, including institutional investors, broker-dealers, invest✅ment platforms, financial advisors, and high-net-worth individuals.

In this article, we'll explore the highly lucrative field and explain how these experts bring in the big money, plus what a career in third-party marketing actually entails.

Why Hire Third-Party Marketers?

Hedge funds hire marketers because the 澳洲幸运5官方开奖结果体彩网:hedge fund manager's core expertise is usually in managing the portfolio for investors, not growing new relationships with them. While the majority of hedge funds use only one marketing firm at a time, some do employ several, assigning specific geographical regions or distribution channels to each. Most third-party marketers make money by charging a small retainer while also taking 20% of all 澳洲幸运5官方开奖结果体彩网:management fees on the assets raised.

Becoming a Third-Party Marketer

One challenge of starting a third-party marketing career is finding a firm that will take the time to show you how they operate and compete against other firms in the industry. Most marketing firms play it close to the vest and are slow to hire unless the individual applying for the job is coming from another third-party marketing firm or can show a substantial track record of rai💯sing assets that can be confirmed by some objective means.

Licensing requirements present another barrier to this field. Most well-established third-party marketers are associated with a 澳洲幸运5官方开奖结果体彩网:broker-dealer and depending on what types of products they are marketing, third-party marketers are usually required by law to be licensed. Some third-party marketers establish t🎀heir own broker-dealer to fulfill this requirement while others simply form an agreement with an ex꧒isting broker-dealer.

Types of Third-Party Marketing Services 

Most third-party marketing services are completed off-site within the offices of the marketing firm. These firms may be working on behalf of multiple hed𓃲ge fund managers at any one time. There are dozens of activities that third-party marketing firms provide to their hedge fund clients but most can be split into one of two categories: marketing and sales.

Marketing

The range 🌳of activitie𝔍s completed by a third-party marketer depends on the size and background of both the firm and hedge fund client. The types of marketing services that third-party marketing firms may offer include:

• Developing marketing materials
• New product guidance
• Investor database development
• Media relations
• 澳洲幸运5官方开奖结果体彩网:Request for proposal (RFP) development
• Event marketing

Many third-party marketers work with their hedge fund clients on a 澳洲幸运5官方开奖结果体彩网:commission-only basis, but some with stronger marketing backgrounds may charge a moderate reta♌iner whi🍨le also taking a percentage of the fees on assets raised.

The importance of whether a third-party marketer has helped with marketing, public relations, database completion, or selecting a new assistant 澳洲幸运5官方开奖结果体彩网:portfolio manager pales in comparison to the importance of how successful a third-party marketing firm is at raising asᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚsets for its client. There are exceptions, but most marketers are evaluated almost 🍨exclusively on their ability to raise assets.

Sales

The sales activities that third-party marketers take🅰 on can include:

• 澳洲幸运5官方开奖结果体彩网:Cold calling
• Attending industry conferences
• Managing a sales team
• Choreographing 澳洲幸运5官方开奖结果体彩网:conference calls and on-site visits

In general, a third-party marketer manages the sales cycle for hedge fund clients, involving the 澳洲幸运5官方开奖结果体彩网:chief investment officer or other portfolio managers as needed to educate poten🌜tial investors 🥀or meet with analysts.

Duties include educating potential investors or meeting with analysts. Sales cycles can range from as little as six weeks to as long as 18-24 months. Because of this, most third-party marketing contracts are for three to five years and often include momentum clauses that ensure ꦡ;the marketer is compensated even if the sale comes in after they stop working with this particular hedge fund clieꦬnt.

Due Diligence on a Third-Party Marketer

Hedge funds conducting 澳洲幸运5官方开奖结果体彩网:due diligence on a third-party marketing firm should always ask questions about the firm and its employees. Evaluating a potential marketer should be as rigorous as completing an RFP for an institutional consultant. A partnership is being formed, and investing time and money with the wrong professionals can be expensive in terms of real dollars and 澳洲幸运5官方开奖结果体彩网:opportunity costs.

Ar𝕴eas to cover while conducting dꦚue diligence on a third-party marketer include:

• Past work experience
• Current licensing and broker check
• Asset-raising history throughout their careers
• Asset-raising track record while working together within the firm
• Referrals from past hedge fund clients
• Number of years experience
• Scope of their 澳洲幸运5官方开奖结果体彩网:distribution channel expertise
• Number of total current clients
• Potential commitment of time in terms of hours per week and duration of the contract
• Personality and culture of the group

At the same time, third-party marketers also need to perform due diligence on a potential client. If a 澳洲幸运5官方开奖结果体彩网:hedge fund manager has a poor reputation, it could reflect poorly on the marketer that ꦓis doing the promoting.

The Bottom Line

The potential to soak up 20% of a hedge fund's management fees is an obvious attraction to this career path. However, this is a challenging, cutthroat industry to work in. While third-party marketing services will always focus on marketing and sales, their service models continually evolve and adapt to meet the demands of their hedge fund clients.