|
MICHAEL WATT
Pssst. . .Hey buddy, got a million dollars to spare?
Well, maybe you don't, but there are plenty of people out
there who do, and the Internet is going to make it easier
to encourage them to invest that million dollars (or more,
obviously) in a hedge fund.
At least that is the belief of Dr. Rama Rao, CEO and president
of RR Capital Management (rrcm.com), an investment management
company based in Bohemia.
"The Internet is the most cost effective medium for
doing business and allows you to change the rules of the game,"
Rao explained during a recent interview. "Doing business
on the Internet is like driving on an expressway At first
the speed may be disconcerting, but the people who do not
make an effort to get used to driving that fast are doomed
to take the local streets for the rest of their lives."
He added, 'The benefits of doing business at the speed of
the Internet outweigh the dangers of the occasional crash."
Even though Rao's hedge fund requires a minimum investment
of $1 million and is obviously designed primarily for sophisticated
persons and entities that qualify as "accredited investors,"
Rao sees his company applying the same Internet-inspired business
practices that have led to the success of sites such as Amazon.com.
"Hedge funds go only to highly networked individuals,
organizations and corporations (who are) sophisticated in
wealth and knowledge. Only those who understand the risk get
to partake of the reward," Rao explained. "Yet more
than 80 percent (of those who qualify) have home computers.
As a result of their being able to do research on the Internet,
there is a big difference in the customer knowledge base."
Rao sees this increased knowledge base raising the collective
comfort level of prospective investors and inspiring a migration
of Baby Boomers from mutual funds to hedge funds because the
individual has so much more information available through
the Internet.
"Assets in hedge funds are growing exponentially,"
Rao said. "They've grown from $20 billion in 1992 to
$200 billion in 1998, and it's expected to be a trillion dollar
industry in 10 years."
Where is that growth going to come from? According to Rao,
"There are two million highly networked individuals and
only two percent of that market has been penetrated. The Internet
can facilitate deeper penetration a friendly, non-threatening
way.
The total individual net worth of this network is $10 trillion,
and they have invested less that $200 billion in hedge funds."
Rao knows from growth. Before founding RRCM, he was chairman
and CEO of Excel Technology, a technology-based company on
Long Island that grew over a five year period in the early
1990s from one employee in one location with 1,000 square
feet of space to five locations worldwide with 300 employees,
going from $100,000 in annual revenues to $50 million. Rao
believes that one must be an entrepreneur to create wealth
and an investor to preserve and grow that wealth.
As with any other Web site, Rao's ability to drive potential
leads - and in his case qualified leads - to his site is going
to play a crucial role in determining the success of his endeavor.
Right now, the industry is trying to figure out the best way
to go about doing this, and there is no shortage of opinions
as to what works and what does not.
The current buzz in certain circles, for instance, is that
banner advertising is waning, yet the latest report from internetnews.com
said online advertising expenditures are expected to reach
$7.1 billion by 2002, with the big gains driven by increases
in PC penetration and Web usage. The new research report comes
from Simba Information in Stamford, Conn. and is entitled
"Web Advertising 1998-99: Market Analysis & Forecast."
"Growth rates will peak in 1999, when Web advertising
expenditures hit $5.5 billion," a 161.9 percent increase
over $2.1 billion in 1998, according to Simba's projections.
"The biggest reason Web advertising continues to explode
is that the emerging demographics of the Web look more like
those of the rest of the world," said Tim Mullaney, the
report's author.
Finally, when my younger brother returned from two years
in Germany courtesy of the United States Army, he headed not
for home nor for the bright lights in the big city Rather,
he hightailed it to Coney Island because he believed Coney
Island represented everything fun about America.
You don't have to go to Germany for two years to develop
such an affinity for Coney Island. Just visit coneyislandusa.com
and all the visual excitement of Coney Island itself will
be yours without the hassle of driving to Brooklyn or the
joy of sitting in a puddle of spilled soda. While at the site,
be sure to check out Baby Dee, The Human Hermaphrodite - Half
Man, Half Woman. Half fun!
|
