Reflecting the same trend, it is hard to meet a consultant who has not recently picked up one, two or, in some cases, half a dozen hedge fund clients. That ought to make everyone happy, but it doesn't, and this is because there is a paradox at the heart of it. Hedge funds are hiring PROs to kill, rather than create, publicity. Hedge funds have traditionally been secretive. A minority may talk to journalists, but none like to be seen to have done so, and have an aversion to being named and quoted.
Even when engulfed by a crisis, most hedge funds still cannot bring themselves to explain publicly what is going on. For every hedge fund manager who feels he has an interest in disclosure, there are two who worry what their peers will make about this breach of secrecy.
I think this is very clever. A survey by the accountant KPMG found that while 15 per cent of hedge fund managers were talented, most
were rubbish (KPMG said it rather more diplomatically) - yet the code of secrecy creates the impression that hedge funds have something worth hiding. It is rather like the alchemist's black box, which turns base metal into gold by a mysterious process.
This mystique has served hedge funds well, but the smart ones realise it cannot last. Performance failures will raise questions, while competition will lower returns and make the business less extreme and more mainstream.
The smart ones are preparing for that day.