There’s a new dating website in town. This one doesn’t care if you like brunettes, how often you shower, or if you would ever have sex on a first date. Instead, it wants to know what you like in a portfolio. And as with any online matchmaker, when you fill out your anonymous online profile, trudge through the survey questions, and arrive at your algorithmically determined matches, you’re still facing quite a bit of risk.
The new website Hedgez is doing for investors and hedge funds what sites like Match.com and OkCupid do for singles: take their self-descriptions, run their preferences through a program, and offer suggested matches.
Until recently, hedge funds couldn’t court investors publicly. But as of Sept. 23, when Title II of the JOBS Act went into effect, hedge funds and other small businesses with private offerings can mass-market themselves to potential investors.
There’s just one problem: “Hedge funds are very smart about what they do but don’t have a clue about how to raise money,” says Jeffrey Schwartz, Hedgez founder and chief executive officer.
Hedgez uses the tricks of online marketing to target potential investors. Hedgez does search-engine marketing and dives into data from social networking sites such as LinkedIn to target investors based on characteristics such as job description, job history, and geography.
Once lured to the website, investors can search for specific funds or build profiles by answering questions about their investment style, risk appetite, and goals, and let the site’s algorithm do the work. Users are presented with up to five matches, with comprehensive information and performance figures, from a database of more than 6,000 hedge funds. The service is free for users, and charges hedge funds a fee for each inquiry the fund receives. While only “accredited” investors—those who meet income or net worth minimums set by the Securities and Exchange Commission—can put money into hedge funds, non-accredited investors can create investment profiles on Hedgez and access information about other investment options. Schwartz says he aims to have 10,000 investors a month using the service, with about 30 percent of those accredited.
It’s up to the investors whether they want to break the ice and initiate a relationship. Given the drop in hedge funds’ performance lately—they lagged the Standard & Poor’s 500-stock index by about 10 percentage points this year, do investors really need an easier way to find them?
I think I’d prefer to take my chances with online dating. At least then, I know we’d split the check.