Today’s guest post is by WalekPeppercommer, Tom Walek .

Question: How do you hide a business that controls more than $2 trillion dollars, employs tens of thousands of people, directly impact markets and businesses, and helps determine the financial well-being of millions of people from all walks of life?

Answer:  Call them hedge funds.

From secret and humble beginnings, hedge funds today have grown fantastically in size.  They are part of virtually every pension fund portfolio (Calpers notwithstanding), every Wall Street deal, every market headline and many business bankruptcy turnarounds.  Hedge funds are widely held to be “the smartest guys on the Street.”

Lagging that growth in size is the reputation of hedge funds.  Lacking legal leeway and business cultural desire to engage with the public or the press, hedge funds are defined by outliers and others in the form of insider trading scandals, big compensation, blowups, and finger-pointing about virtually every financial disaster – rightly or wrongly.  The resulting bad reputation is pervasive.

That’s starting to change.

Thanks to competitive pressures, enlightened regulations treating hedge funds as Registered Investment Advisors and new regulations like the one-year old JOBS Act, the mandated secrecy of the industry is being lifted.  In response, some surprising new levels of information, transparency, and first steps toward public engagement are starting to emerge from the hedge fund shadows.  Data points from a just-released Peppercomm study of the changing hedge funds communications landscape:

•    66% of 2014’s largest 292 hedge funds are on LinkedIn, and 10% are on Twitter. Of these, six hedge funds post on LinkedIn at least once a month and seven hedge funds Tweet at least 10 times a month.

•    Monthly hedge fund mentions on Twitter recently reached a high of 80,000 Tweets, and have not fallen below 40,000 in the last two years.

•    Among the largest 285 global hedge funds in 2013, 14% launched websites in 2014.

•    Among the 185 global hedge funds with $1 billion–$5 billion in assets, 23% had websites in 2013. By June of 2014, an additional 39 funds launched websites and 11 more moved from a closed site to a more open site.

•    Media mentions of hedge funds are projected to reach record levels above 100,000 in 2014, up nearly five-fold over the last decade.

•    Hedge funds are hiring internal communications executives to manage brand, visibility and reputation.

Hedge funds on social media, opening web sites, thinking about brand and reputation?  Yes, but tentative.

The engagement platforms are there.  The opportunities to be more transparent, demonstrate financial insight and engage in thought leadership are emerging.    What’s yet lacking is a clear desire to fully employ these platforms strategically.

Make no mistake, these steps toward more openness by hedge funds have motivations other than a desire to be better thought of in the neighborhood.   Repeatedly, figures show that big investors direct assets to better-known, well-trusted brand name hedge funds.  That’s a powerful push.

Reputation is built on a careful calculus of transparency, engagement and honesty.  That’s happening now as hedge funds open up, take a few steps in that direction.  It’s healthy and it’s good for the future of the industry. Let’s keep this moving.