Why Hedge Funds are Susceptible to Online Reputation Management Problems

As far as the general public goes, the financial industry gets a pretty bad reputation. So much so, that millions of Americans rallied behind a presidential hopeful whose platform was constructed on a foundation based on this sentiment. And, amongst the various types of institutions that comprise the industry, hedges funds tend to get an especially bad reputation due to the amount of risk involved in the business model and the sheer amount of money in motion.

So, take a general notion from the post-2008 economic meltdown zeitgeist. Then, add a disgruntled ex-investor with a bone to pick and a keyboard at hand. Mix them together, and what do you get?

Maybe you just get a black eye. Although a black eye itself won’t kill you, if everyone sees you with it, your reputation is liable to take a pretty big hit. This analogy is as relevant when walking down the hallway in high school as it is in business: what may really only be a blemish can ratchet up through the rumor mill into a full change in perceived value or character.

How the Internet Influences Reputation

The internet can be especially funny in this way. Search engine results are algorithmically designed to feature what is trending, very easily contributing to a snowball effect. Before you know it, posts that smear a hedge fund’s reputation can find their way to the first page of results when simply searching for that fund’s name.

In addition to the uphill battle that hedge funds naturally face when attempting to manage their online reputation, there is the inherent tendency for people to get awfully nasty when it comes to their money. Since individual hedge fund investors can have colossal amounts of money at stake, losing a few investors can translate to huge losses for the business.

A tarnished reputation for a hedge fund can be a difficult thing to repair. SEC regulations make it so that only certain topics can be mentioned in content put forth by the fund, meaning that only experienced reputation management firms such as ourselves should handle such matters.

Though, through carefully vetted content and a host of other special techniques (including SEO optimization considerations and deliberate social media action), it is possible to mend a hedge fund’s reputation over time.