The JOBS Act has so far occasioned a modest quantity of advertisements by hedge funds, rather than the deluge some expected. Most managers have decided to hold off on advertising altogether, to use the liberalized advertising rights indirectly (e.g., via wider-ranging public comments) or to take a “wait-and-see” approach. For managers in the last class, the experience of Topturn Capital is instructive. Last December, Topturn was among the first hedge fund managers to publicly release a video that, while not an “advertisement” in the traditional retail sense, may well have run afoul of the pre-JOBS Act ban on general solicitation. Released into the post-JOBS Act world, however, the video has garnered significant attention without violating any law or rule. The video has had unintended positive consequences – notably, utility in recruiting talent – while the downside has thus far been muted. The Hedge Fund Law Report recently interviewed Dan Darchuck, Co-Founder and CEO of Topturn, in an effort to understand Topturn’s hedge fund advertising experience at a granular level. Our interview covered, among other things, Topturn’s rationale for creating the video; the video’s content, distribution and intended audience; its impact on AUM and investor relations; the response from regulators; how Topturn approached the legal disclaimer in the video; the relevance of AUM levels in determining whether to advertise by video; and the cost and other mechanics of creating the video. See also “Schulte, Cleary and MoFo Partners Discuss How the Final and Proposed JOBS Act Rules Will Impact Hedge Fund Managers and Their Funds
,” Hedge Fund Law Report, Vol. 6, No. 29 (Jul. 25, 2013).