The last 15 years have witnessed a monumental shift in the public perception of hedge funds and those who manage them. What was once an industry anonymous to the majority now increasingly finds itself in the spotlight − for both the right and wrong reasons. Who are these people? How are they making the kind of money being talked about? What are they doing with their vast amounts of wealth? Mystery has given way to intrigue in the 21st century.
For those on the outside, life as a hedge fund manager seems easy. A life of risk taking, fast living and significant financial gain. But life in hedging isn’t straightforward; it involves long hours, family sacrifice, huge stress and no guarantees. And yet it’s a job that you enjoy and in which you excel. It is therefore no wonder that those behind the funds are often caught off guard by the intrigue and intrusion that has built up in recent years, and with the UK general election and the start of the US presidential primaries just around the corner, hedge funds are likely to come under the microscope.
Cash for favours and political donations are hot topics at the moment, and with politicians on both sides of the Atlantic on a war footing, 2015 is going to be a sensitive time for businesses and hedge funds. With the lines between old and new media blurring, prominent individuals – in particular hedge fund owners – are starting to experience a new threat to reputation, whereby materials published on social media are assumed by the media to be acceptable for publication.
For example, imagine you attend a political fundraiser and another guest photographs you and shares it on their Facebook page or Twitter feed. The media then get hold of the image and suddenly you’re ousted on page six of a national tabloid. Unfortunately, in this day and age, a simple dinner can become a public discussion. We in the West are very good at knocking down successful people, and social media has only increased this. It seems nowadays that you can’t support a cause without an ulterior motive. Nothing is taken at face value anymore, and people try to find the bad in everything.
Already there is speculation out there about “cash for favours”. In the UK the Labour Party is threatening to abolish the so-called stamp duty exemption for hedge funds, so any donation to the Conservatives is bound to raise questions of motive and self-interest. Perhaps it doesn’t matter what people think of you, but it becomes particularly important when your family’s privacy is affected. Why should details of your children’s activities become public just because the press want to know more about your background? Why should details of your bonus be public or details of where you live or where you take your holidays?
The law does and will protect your and your family’s privacy, but it is up to you to keep it private in the first place, and not expose yourself to attack. Once you make private information public, then it is usually up for grabs by anyone.
There are things you can do to protect your privacy and to keep your home and family life private. This does not mean going to ground, but instead making a distinction between home and family life:
One prominent businessman recently complained to us that details of his bonus were in the public domain and wanted to take action to protect the information. It turned out the details were revealed by his daughter who had posted the information on Facebook having heard a discussion at the dinner table. These are new risks that we all face. Previously, children might have told their friends something and that was that, but now their discussions are there for all and sundry to see. Crucially, acting fast is a necessity, because if information does get out then it needs to be stopped immediately before it gains traction. In addition to using the law, hedge fund owners can benefit from assessing their own digital footprint. The trick here is to get interested before someone else does. Forewarned is forearmed and, ‘private’ social media settings aren’t going to cut it, because for prominent individuals, the picture is far more complex.
Ultimately, only by understanding your own digital footprint and the footprints of those closest to you is it possible to ensure your private life remains private from prying eyes, especially with the UK general election and the US presidential primaries just months away.
Rachel Atkins, partner at Schillings, is a litigation lawyer specialising in reputation defence. With a client base comprised of entrepreneurs,privately owned businesses and FTSE 100 companies, Atkins couples her experience in media law with a detailed knowledge of reputation threats that emanate from non-media sources.