Websites and the alternative investment industry 23 January 2014
“But Mr Caxton, we don’t need a paper copy of this news story, everyone talks to each other in this village”. Overheard in Westminster, circa 1476.
There’s no evidence at all that the above conversation ever took place but it’s not hard to imagine. After all resistance to new technology is nothing new.
But if we look at the alternative investment sector - an industry that has been transformed by technology for trading, transactions and newsfeeds - there is evidence that a significant number of firms within it find it hard to come to terms with the need for a website.
Now the alternative investment fund industry is a diverse industry, encompassing such activities as private equity investment, commercial property funds, and hedge funds. But our experience tells us that despite the diverse nature of the industry there is a common lack of belief in the value of the corporate website.
Strange isn’t it? After all, the web has transformed the way we communicate and become as mainstream as microwave meals or mobile phones. What’s so different about private equity, property funds or hedge funds?
Well clearly there is a difference. We are after all talking about niche companies in a niche sector and we wouldn’t dream of comparing their communication requirements to those of, say, banks or insurance companies.
But we don’t believe such differences negate the need for a website; something that is in 2014 simply a part of the way we live, love, work or play. To support our view we’ve listed below a few of the objections we often hear – and our reasons for saying “think again”.
Q: “I've raised more than $1bn without a website - why do I need one now?”
A: If you've raised substantial assets, the chances are you have also invested heavily in an institutional framework, ie trade & risk management systems, IT and other infrastructure. Can you be really "institutional" without a corporate website? Can you name other financial institutions without a website?
Q: “We have only a handful of investors and we engage with them directly, face-to-face or by phone. What use is a website?”
A: Investors may be in different time zones, so offer them secure access to fund material at a time that is convenient for them. A website is not a replacement for the personal contact you have with investors, in fact it’s an adjunct - it positively aides it.
Also it is worth considering how to inform people who know anything of you – potential investors for example – about your business...
Q: “My clients don't use the internet and won’t access a website”.
Really? Think about it - These same people don't have an iPhone or Blackberry? They don't read research and market-related data either at their desk or via their mobile device? You can encourage use of a website by alerting your clients to the relevant and pertinent materials they can find within. With markets ever-competitive and technology advancing so quickly, investors now demand more information, more quickly, more often in order to complete their due diligence. Once invested, they do like to see frequent fund reports.
Q. “Investors prefer to receive our monthly reports via email”.
Posting your monthly reports on your website does not mean that you replace emailing your clients, if that's how they would like to receive them. Do think about recipient choice though. Clients are probably receiving a number of emails at the same time and in-boxes get very full, quickly. A website can provide password protected access to historical reports, securely organised in one place – by date and/or topic - rather than searching their email inbox.
Now these are only a few of the reasons we ask you to think again about a website - they don’t even begin to scratch the surface of all the other benefits a website can bring such as brand building or employee engagement. We’ll save them for another day.