About the time I began getting really excited about social media, I began to think about how I could engage SkyRank visitors to interact with one another to share ideas in a hedge fund social network. How great it will be to have the thousands of visitors to SkyRank exchanging ideas, commenting on funds, and the tens of thousands of funds themselves interacting with one another. Why shouldn't they share, I asked? Why wouldn't they, I dreamed...
Around that time, I also began talking with respected leaders, friends, and colleagues in both the hedge fund and social media world. "It won't work," they told me. "They're too private," they warned. "It's not what they do," as they shook their heads as if to sing..."still crazy after all these years..."
Much can be learned while studying by one's self. However, truth in knowledge can only be attained by studying and communicating with others in a group. This is so because discourse occurs, disagreement ensues, and it is EXACTLY this discussion that leads to the improvement of ideas, the sharpening of our minds, as true understanding and knowledge is attained. You simply cannot discuss things with yourself and get to the truth.
Admittedly, and in truth to myself, SkyRank was conceptualized alone by me, and primarily run alone by me, and while my company owns unique intellectual property assets primarily in the form of hedge fund data and a patented and very special flexible hedge fund rating system that works really well, I must acknowledge it has been an individualized effort by me, myself and I. Oh, I have discussed ways to improve it with users, but the real back-and-forth with peers has been missing. The discussion that leads to the sharpening of ideas did not occur... until now ... I'm very happy to have teamed up with Trusted Insight and the interesting people and investors there. We're developing great things there and having so much fun while doing it.
Thinking about the value of learning in a group, I tried to understand this on a deeper level from a vantage point that I know too well. I began to think of my life as an entrepreneur, an idea weaver. ENTREPRENEUR LAW: When you share your idea with other entrepreneurs and investors, and they all think it's a great idea, chances are it will fail miserably. If everyone goes in one direction, chances are they're wrong. So, perhaps because most think a social network for the alternatives space won't work, can't work -- perhaps it's not so crazy after all. I mean, do we really want to stay so closed and so private?
OPEN = TRUST. CLOSED = DISTRUST.
If anyone is on Hashable, you'll see that I'm one of the most active people on there. I just love Hashable and what they're doing to map introductions and relationships online. If you haven't taken a close look at them, you really should.
So, here's how courtship between hedge funds and social media has begun.
TRUE STORY
The most active member of Hashable, "Mike" introduces me to a Consultant friend of his, "John" who is exploring different directions with his career. Mike does this by using Hashable so that our introduction is recorded and he can track our progress. John and I share an email interaction, then have a phone conversation, neither of us having any idea of where it will go. But, we immediately hit it off personally and professionally. He tells me his friends are the insurance company capital allocators in the United States. I tell him I have a database of thousands of hedge funds, and that he should talk with his friends to see what types of hedge funds they would like to invest in. He does this and is pleasantly surprised that they tell him exactly what is interesting to them. Open. Trust. I then tell him, we should also make Mike a partner, after all, he did introduce us. Open. Trust. And, we all agree to be equal partners. Open. Trust. Stop. Hedge Funds. Insurance Companies. Hashable. Social Network. Open. Trust.
Tri-Coast LLC is born.
So, if anyone knows of a large hedge fund that can guarantee returns of Libor + 2%, give me a call, we've got a bit of capital ready for that type of fund.
And, if anyone else doesn't believe that the courtship of social media and hedge funds isn't gonna get real sexy real soon, also give me a call, cause I'll take that bet, and soon, we'll even have a way to track it.
Agreed social media is making more of an impact in the investment world. Slowly, compliance at B/D's are allowing more posts as well...Social media in our world will only grow indeed. Nice post.
ReplyDeleteThere is certainly a broad cultural shift to people being willing to surrender a bit of privacy it return for richer information. People don't even think of booking a hotel, buying a car or eating at a new restaurant without taking the temperature of other consumers of those products and the phenomena of socializing around investments in public securities is also already well established (yahoo message boards, investment clubs etc.).
ReplyDeleteHowever, while investors in private securities do socialize their opinions, it's often a whisper during a side bar at a hedge fund conference or a class action law suit! This probably has a lot to do with the size of that investor universe, perceived regulatory pressure, the profile of the investor and a well fermented culture of secrecy.
These reasons can't win the day though. How many Madoff investors would have loved to have been aware of Harry Markopolos's tweets! As an investor, I want to understand my co-investors' motivations for increasing or reducing their exposures. I want my investment thesis challenged. I want news fast and unfiltered by the fund manager. I want to be in the loop. The social media revolution is coming to the hedge fund world, there's no alternative :-)
Ger - that's an excellent insight! Thanks.
ReplyDeleteSocial media is coming to a hedge fund near you, pure and simpe. It is a natural and healthy development because it seems demand-driven, rather than dragged in by oversupply. The 2010 BNY Mellon survey of institutional clients showed that 35% of clients would like to use more social media, while only 9% actually have used it. Sounds to me like lots of room to grow.
ReplyDeleteA recent court case also points up the drive of investors to know other investors in the alternative space. The court there allowed Brown Investment to get a list of all other investors in Parkcentral, a defunct hedge fund, so they can all band together and share litigation and discoivery costs.
The appetite is there and feeding surely will come of it.