05/18/2011

Fund Marketers Form European Trade Group

A group of London-based marketing professionals is starting a trade group for European firms that specialize in raising capital for hedge funds.

While hedge fund marketing firms in the U.S. are represented by Sifma and the Third-Party Marketers Association, their counterparts in Europe have lacked a cohesive voice. The result, according to veteran marketers James Parker and Richard Watkins, is that the role of fund-raising professionals has been widely misunderstood and undervalued by Europe’s hedge fund industry.

Parker, who heads startup Aravis Partners, and Watkins, the founder of Liability Solutions, are now working with the partners of three other London firms — Astir Capital, Campion Capital and Trinity Capital — to get a trade group off the ground. They’ve each kicked in capital to incorporate the yet-to-be named association and launch a website. The plan is to begin recruiting members within a couple of months.

“I was always slightly aggravated that the image of third-party marketing firms in Europe is that they were a rather odd group and didn’t have the same professionalism as private equity placement agents or in-house marketers,” said Watkins, who founded Liability in 2000. He added that existing industry groups such as the Alternative Investment Management Association and Hedge Funds Standards Board don’t specifically address the needs of third-party marketers.

Late last year, Parker and Watkins set out to identify hedge fund marketers across Europe and invite them to a planning meeting at a London pub. But when the list of interested parties grew to 80, the organizers had to find a larger venue. The meeting was held in November with about 65 marketing professionals in attendance.

Among them were Richard Crosby, who ran the London office of U.S. hedge fund backer Weston Capital before starting Astir in 2009; Philipp von Habsburg, who recently left Swiss fund-of-funds manager EIM to launch Trinity Capital; and Will Campion, who founded his namesake firm in 2003. Parker set up Aravis last year after a five-year stint with Asset Alliance marketing unit Hedge Harbor.

Parker and Watkins expect membership in the new group could grow to 40 by yearend. For now, the group’s founders are focused on establishing criteria for membership. One thing seems certain: Members will have to be registered with the U.K.’s Financial Services Authority or their local regulators, though most of the marketing firms are, in fact, based in the U.K.

“We’ve been watching what’s been going on [with regulation] in the U.S. and thought there might be some lessons the industry can learn,” Parker said. “The reality of the post-2008 landscape is that a lot of the funds we’re trying to introduce to investors want to see that we are properly regulated and authorized.”

Once the association is up and running, the founders plan to reach out to U.S.-based marketers. The expectation is that some American firms may seek to join the European trade group because the Third-Party Marketers Association isn’t specifically focused on hedge funds.

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