Dirty, dirty 'hedge funds'

Some 'hedge fund" managers would prefer to be called something else.

One of my colleagues recently wrote about a hedge fund. And she had the gall to call it a "hedge fund."

The firm objected – at first directly, and then via its outside PR representative.

It wanted to be called an "activist investor," arguing that it doesn't short stocks (long-only) and that it charges below-market fees (1 and 20). Neither was terribly compelling, since hedge funds today are more defined by structure/access than by strategy (so long as public equities are involved).

The firm also said that it has been registered with the SEC for years -- perhaps a more viable differentiator before all hedge funds were required to register via Dodd-Frank.

To me, the firm's passion for a different title is reflective of what a dirty word "hedge fund" has become in America. Maybe like "leveraged buyouts" was 15 years ago – thus leading to the kinder, gentler "private equity." In fact, one hedge fund manager recently told me about how his mother feels the need to preemptively "defend" her son when others ask what he does for a living.

Out of curiosity, I asked my Twitter followers to define "hedge fund" in 140 characters or less. Below are some of the more amusing replies (which probably go to prove the firm's semantic point):

• @ReformedBroker A vehicle that turns investor capital into Greenwich real estate
• @fbonnaci Insider Trading for Insiders
• @davepell They are the acorns that become the Oak. Only the oak is made out of plastic and is inflatable.
• @mediainvestors Entity focused on professional gambling using pooled funding typically w/ ST focus on specific publicly traded instruments.

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