So, You Say You’re Closing A Fund?

It’s always nice, as a fund firm, to enjoy burgeoning assets, happy investors and glowing media coverage. But in the often unpredictable and volatile world of financial services, it’s sometimes necessary to re-evaluate your core operations, and make the difficult determination that one of your funds has to go.

 Inevitably, funds are closed or merged simply because they don’t have enough assets to justify keeping them open. But while closing the fund itself can be an easy decision, delivering the news of the closure can be a bit hairy, and can potentially attract negative attention from reporters and shareholders.

 So, as you make the transition, here are five PR tips to keep in mind:

1. Remember Your Objectives. Don’t forget why you launched the fund to begin with. Being able to expertly articulate this will help you convey to the public why it needs to be closed. Be prepared to explain precisely what the firm’s core objectives are, and how the closure of the fund keeps the firm aligned with those objectives. Explain why the fund no longer fits the firm’s business model and how the closure will benefit shareholders moving forward.

2. Give a Gentle Nod to Underperformance. The fund’s underperformance will be very public and you don’t want to lose credibility by failing to acknowledge it. It’s okay to note the obvious, just try to keep the conversation within the context of your objectives.

3. Develop a Statement. After delivering the news to shareholders, you should carefully craft a public statement announcing the closure. That statement should be simple and to the point: State what you are doing without getting too bogged down in rationale. It’s important to have that statement, along with pre-approved talking points, that company officials can all consult throughout the period of media response.

4. Seize the Forum. When you do get media attention, use the opportunity to expound on your objectives as they relate to the closure. Use the platform to discuss the development, but also to talk about the firm’s narrative, your enthusiasm for the future, or your continued commitment to investors. If, for example, you currently want to scale back your eight funds to limit yourself to the seven funds that really demonstrate your expertise in alternatives, seize the moment to draw some attention to the value of that expertise.

5. Keep the Brand Intact. Throughout this process, remember it’s about keeping your brand intact, and communicating change as fluidly as possible. You want to deliver the news of the closure, while instilling confidence in your decision making process and your management skills.