AIMA unveils updated guide for hedge funds dealing with media

Date: Monday, December 19, 2011
Author: Martin Leonard, COO Connect

The Alternative Investment Management Association (AIMA) has issued an updated guide for hedge fund managers on how to deal with media.

AIMA’s original Guide to Media Relations for the Hedge Fund Industry, published in 2006, highlighted the commercial importance of effective media relations. The latest version acknowledges that progress has been made when engaging with media although “there is still much work to be done.”

AIMA's guide stresses media relations need to be carefully managed and individuals should clear interviews with compliance beforehand. Furthermore, managers which do want to deal with press should have dedicated spokespeople to handle media and these people should be given adequate training.

“The guide is applicable to hedge funds managers who want to engage more with the media. We discuss the positives as well as the potential negatives of this,” said Christen Thomson, head of communications at AIMA.

The explosion of social media has also raised new challenges and opportunities for the alternatives space. A recent survey by PR firm MHP of 77 managers, each with at least $1 billion in assets, revealed the majority of these organisations ignored social media. Some 8% didn’t even have their own website. Furthermore, 1% of managers use Twitter, 3% have their own channel on You Tube and none utilised Facebook.

“Firms that have embraced social media relay relevant news, white paper and industry analysis online, helping build reputation and trust with prospective clients,” read the guide, although it adds, “growth in this new territory should not be done without careful planning.” Hedge funds need to have a compliance infrastructure in place when it comes to social media. AIMA recommends “a clear written policy for firm and employee participation on social media.”

The guide acknowledges confidential information such as performance reports and client letters often find themselves slipping into the public domain. It recommends funds “attempt to limit this unauthorised distribution of confidential material (through) electronic watermarking (and) password protected file sharing.” However, these are not guarantees for secrecy and managers should draft these documents assuming they will end up being published.

In crisis situations, the guide suggests dealing with the issue rapidly by pushing out a statement to discourage speculation or rumours. Aggressive monitoring of news articles should be encouraged to prevent any factual errors being printed.

The guide was written by AIMA’s Christen Thomson, Thomas Walek, founder and president of PR firm Walek & Associates and Robyn Klinger-Vidra, investor relations manager at Liongate Capital Management, a London-based fund of hedge funds (FoHF).