I worked for years as a third party marketer for hedge funds and in the following video I am going to explain what third party marketing is and the role of third party marketers.
Video Transcript/Summary: The strategies and tips provided within this video module include:
- The definition of third party marketing is the hands-on capital raising and marketing of investment funds by independent consultants that work outside of the fund.
- Third party marketers typically receive 20% of the fees that are billed on the assets raised although this number and structure varies by fund and contract.
- There are low barriers to entry for third party marketers and it can be very lucrative.
- Third party marketing firms typically take on 3-5 clients at one time.
- Some third party marketing firms work on a retainer as well as a percentage of the fees on the assets raised.
- The other model is to not charge a retainer but the third party marketing firm will take on many more clients, often across a broad spectrum of strategies.
- A growing trend in third party marketing is to have the firm focus on a single distribution channel such as endowment funds, pension funds, etc.
- Be very detailed in your contract negotiating to avoid later disputes.
I hope that this video has provided you with a completed definition of third party marketing as well as some tips for evaluating third party marketers.
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