Blog:  Hedge Funds and Reputational Fallout

Though some hedge fund founders have cultivated rock star status in recent years, most follow a conservative approach regarding their public profiles.

The most highly respected hedge funds often are run by the most low-profile founders. John Paulson, perhaps the most low-key, made a rare public appearance recently when his family’s foundation announced a $100 million donation to Central Park.

A common hedge fund issue

A common reputational issue that many funds encounter is the investor lawsuit.  Even the most well-respected funds face them. One such filing can rank high on a Google search of a company’s name for years, even if it is the only such instance in a long history of good standing.

In many situations the content becomes prominent on the Internet because there is so little online information about the company. (The less information that is online about a topic, the higher new information about it will rise and the longer it will stay high on searches.)

Hedge funds facing such issues have more freedom now to publish a broader range of marketing and other online information than they have in the past.  Consistently publishing new online content is a fundamental aspect of online reputation management. Rebranding can’t confer trust capital or restore a tarnished reputation, but it can re-establish and help rebuild a company’s image. It can also signal a new direction…and sometimes that is a good tactic.