Hedge Funds Must Embrace the New Communications Landscape Post-JOBS Act
In anticipation of the SEC’s final rulemaking on the JOBS Act, the hedge fund industry is preparing for what are expected to be landmark changes. With the elimination of the prohibition against general solicitation and advertising, hedge funds will now have the ability to openly communicate with investors and the broader public. But to what extent will these changes affect the way hedge funds currently do business? And who will these changes benefit? The industry seems to have taken a wait-and-see approach since the President signed the Act into law in April. As expected by many, the SEC has shuffled its feet, missing the original 90 day deadline to finalise the rules, followed by an additional announcement that it would be accepting public comments for 30 days. During this time, we have yet to see Bridgewater Associates billboards in Times Square, or AQR Capital ads splashed on the back page of The Wall Street Journal, and still no D. E. Shaw Stadium, but will we ever? It is our belief that the titans of the industry won’t be changing their strategy any time soon; however new rules will create a huge opportunity for smaller funds to distinguish themselves from competitors by communicating more broadly.