In his 1964 study of media theory, Understanding Media, Marshall McLuhan wrote “the medium is the message” to suggest that the way by which a thought is conveyed is more important that the actual message itself. In thinking about a flurry of recent profiles of hedge fund profiles in the press, all you need to know is the title (medium) to know what is being said about the hedge fund (message).
With a medium like Bloomberg BusinessWeek or Institutional Investor’s Alpha, you know what you are going to get: in depth analysis of a manager, what makes his/her strategy successful and some facts about how the fund handles risk management or other critical operating procedures. Recent profiles of David Einhorn/Greenlight Capital and Starboard Value follow a the traditional fund profile template. Two other, even more exemplary profiles, written last year were recognized with the Hedge Fund Article of the Year Award.
At the same time, with a medium like Vanity Fair, you also know what you are going to get: a personality-driven puff piece that is light on investment process and heavy on the cliches that all too often define successful hedge fund managers. This didn’t deter Pershing Square’s William Ackman from participating in a feature in the April issue focused on his well-documented short position in Herbalife. The result is an uneven account of Pershing’s investment that, by outlining fallings out between Ackman and other respected investors, like Daniel Loeb and David Einhorn, promotes the idea that Ackman has a “Superman complex” and “an uncanny knack for….pissing people off.”
If we believe that the medium is the message it should not be a surprise that Vanity Fair emphasized conflict, ego, drama and wealth (of course the writer could not refrain from weaving Ackman’s private jet into the story) over the business of running a multi-billion dollar hedge fund. So why answer the phone when a celebrity magazine calls? I don’t know. The outcome cannot be valuable to a hedge fund’s core audience of institutional investors. Maybe Pershing Square wants to reach a different audience — high-net-worth investors, for example.
Ackman has been playing the media game for a long time and understands the risks and rewards, but anyone else should hang up if Vanity Fair happens to call.