Looking for “the one” out there on the open market can be a daunting task. It might be hard to find the perfect match. Are they steady and reliable? Or adventurous and risky? Do they really meet your standards?
With help from a new algorithm-powered website, the search could finally be over. Only instead of pairing up lonely lovebirds a la Match.com, the new website, called Hedgez, hooks investors up with their dream hedge funds. At least, that’s the idea.
On Hedgez, investors can search for specific funds, or build a profile and answer a questionnaire, much like a dating website, to determine which funds might meet their needs. Instead of questions like “what do you look for in a partner?” Hedgez wants to know what you're looking for in a portfolio.
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Prior to last month, hedge funds and other small businesses with private offerings weren’t legally permitted to advertise or court investors publicly. That changed when Title II of the JOBS Act took effect on Sept. 23. Now hedge funds, startups and small businesses can use social media or mass marketing campaigns to advertise to prospective investors.
The free Hedgez service takes an investor’s answers, as well as information that it learns from the user’s social media like LinkedIn – then matches them up with five prospective hedge funds from a database of more than 6,000 choices, according to Business Week Once investors get matched up, they can access comprehensive information about each of their potential hedge fund investments.
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The site, developed by Digital Direct Advertising, LLC, makes money by charging hedge funds a fee for every inquiry the fund receives. In a press release announcing the website’s launch, the company says it’s confident it can deliver “qualified investors of the highest caliber in predictable volume at a cost effective price.”
Jeffrey Schwartz, the founder and chief executive officer of Hedgez, told Businessweek that his goal is to have around 10,000 investors visit the site each month.
Like dating sites, though, Hedgez isn’t for everyone. Only “accredited investors” – those who meet income requirements set by the Securities and Exchange Commission – can actually put money into hedge funds. However, non-accredited investors are still allowed to create investment profiles on the website in order to access information about any of the thousands of hedge funds.
Accredited or not, investors should also consider whether hedge fund investing is right for them – especially given that, on average, the funds have severely underperformed the S&P 500 in 2013, continuing the trend of recent years. Sometimes that perfect match is closer than you think.
