Our thinking Quick reads Effective communications in turbulent times
 
Hedge funds and CTAs
June 2020
4 min read

Effective communications in turbulent times

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In these turbulent times, it’s hard to escape the “info-load”. We are inundated daily with an ever-increasing volume of communications, from daily government briefings to special press conferences to hour by hour feeds on our social media platforms, all competing for that all important share of our time and attention.

While we can agree that the volume of communication has certainly increased, how much of that is just noise as opposed to something of real value?

This is the question facing fund managers looking to stay connected and relevant to their investors, both current and prospective. The value of meaningful and impactful (not just more frequent) communications has never been greater than in these turbulent times.

We recently hosted a webinar, exploring the issues around effective communication for fund managers. It was an engaging and interesting hour, covering a variety of topic areas. A summary of the key take away points is set out below.

Changing Times

It was agreed that crisis-driven communication should continue post-crisis. History shows us that fund managers who invest time and effort in connecting and communicating with their key stakeholders now will benefit later. The key requirements in the current environment were to provide comfort, be clear on performance objectives, and reiterate the plan for achieving them. Fund managers should avoid being seen to be overly confident but should always be honest.

In the absence of physical contact, fund managers may find deal execution and capital raising increasingly difficult. Where fund closings/launches and new capital raisings are postponed, the challenge for fund managers is how to continue to build and nurture relationships with investors. Much of this interaction is now taking place in a virtual rather than a physical environment.

Effective Communication

It goes without saying that communication should be timely (not excessive and unnecessary), consistent (in quality, personality and honesty) and respectful (for personal circumstance and the current environment).

Ultimately however, the effectiveness of your communications should be measured not by what has been said but rather by what has been heard, understood and processed. Fund managers should ensure communications are grounded in accurate data and relayed with confidence and true to the fund manager’s personality. It pays to be aware of the audience you are communicating to – whether current or prospective investors. Most importantly, effective communication also requires effective listening and fund managers can rely on new technology which allows them to optimise their interactions with their investors.

Technology

Technology can tailor investor interactions by gathering consumer data and identifying responsive markets. The impact of data analytics technology may assist fund managers in achieving better outcomes by allowing a more accurate measurement of engagement through key metrics such as email opens, web visits, video views etc.  Such strategies can provide useful input into what to say and how to say it. The availability of digital and social media platforms alongside more traditional forms (such as email) allows variation in delivery and contact and may refresh a fund manager’s message. For example, social media messaging apps (such as WhatsApp) have proven particularly effective for open and personal investor discussions during the pandemic. Video platforms (such as Skype, MS Teams and Zoom) have largely filled the void created by the loss of face to face contact while continuing to provide the familiarity of interaction that comes with non-verbal communication ques,  and these platforms could prove disruptive to established conference call dynamics.

Psychology of Effective Communication

Everyone’s time is limited, even moreso at the moment. To successfully secure a share of that time, fund managers need to ensure their communication is striking, concise and stimulating. Effective engagement with investors is the key to delivering the message.  Crucial to this is to understand how people like to consume information. As data consumption preferences can now be observed and tracked through the use of technology, the sales process is increasingly driven by the buyer and not the seller and fund managers may need to adjust how they interact with their investors accordingly.

A lesson to be learned from the turbulent times we live in is that not all communication is necessarily effective communication. All communication does however convey a message, whether intended or inadvertent. As does an absence of communication often. Perhaps the broader question for fund managers and perhaps for all of us more generally at the moment is whether the messages we are sending show that we have listened to and understood the message we have been sent.

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