Why Hedge Funds Should Steer Clear of Mount Olympus
Melius est nomen bonum quam divitiae multae: “A good name is better than great wealth” runs the Latin proverb, but some hedge funds are trying for a twofer.
Seeking the luster of power and might, many managers have named their businesses after characters from Greek mythology—but companies on the hunt for a letterhead with gravitas should tread carefully while traversing the blood-soaked pages of ancient epics and drama.
It’s a widespread phenomenon: Just pop the name of any major Greek god into Google alongside the word “capital,” and you will find at least one hedge or private-equity fund with that moniker. Dozens of them bear the names of Greek gods such as Zeus, Ares, Hermes, Poseidon, and Athena, or their Roman equivalents Jupiter, Mars, Mercury, Neptune, and Minerva. There is even an ominously named Hades Capital, named after the fearsome god of the underworld.
And apparently, it works. A recently published research study demonstrated a correlation between a hedge fund’s name and its success at attracting investor funds. The study’s statistical analysis found that adding a word that conveys “gravitas” to a fund’s name makes a $250,000 difference in annual inflows. Gravitas, the Latin expression for the virtues of dignity and sobriety, connotes the seriousness of purpose investors hope to find in the fund managers they entrust with their money. And what better way to acquire instant gravitas than adopting a name that invokes the classical tradition that is the very bedrock of Western civilization?
Too often though, the quest for gravitas leads to a mythological name that sends an unintended message. Fund managers would benefit greatly if they actually read the works they are mining for highbrow names, lest they unwittingly select one from the classical corpus with unfortunate associations. For example Hermes, the god of commerce, luck, and wealth, seems a fitting eponym for an investment fund, as evidenced by the many that bear his name… until one recalls that Hermes was also the patron of thieves and swindlers.
Or there’s Medea, the sorceress whose magic enabled Jason to retrieve the Golden Fleece and thereby win power and wealth. This is presumably the reason she became the namesake of London-based Medea Capital Partners. But in Euripides’ telling of the tale, when Jason later deserted her for another woman, Medea avenged his infidelity by slaughtering their sons. Will Medea Capital Partners do the same to its underperforming traders?
Another filicide, Tantalus, who lends his name to several financial firms, was renowned for his immense wealth. When the gods paid a visit to his palace, he attempted to win divine favor with a sacrifice by butchering his own son, roasting him, and serving him for dinner. For his cruelty and impiety, Tantalus was cast into the underworld to suffer the fitting punishment of eternal hunger and thirst, standing in a pool of water that receded whenever he stooped to drink, overshadowed by fruit-laden branches that remained forever out of his reach, just like the alpha that eludes many fund managers.
Then there are the funds named after Icarus. Wooed by his audacity, they may hope to evoke a tolerance for high risk in the pursuit of high rewards. But they forget the most important part of his tale. In the story related by Ovid in Metamorphoses, Icarus and his father, Daedalus, escape imprisonment on Crete by flying across the Mediterranean on wax-and-feather wings. Intoxicated by the experience of flight, Icarus soared higher and higher, plunging to his death when the sun’s heat melted the wax. The experience of sky-high returns suddenly reversing direction is all too familiar to many fund managers and their investors.
Investors often look for a fund manager capable of planning and executing a long-term strategy. Agamemnon, the Mycenaean king who led the Greeks through a 10-year siege to victory over the Trojans, might seem an exemplar of such a manager. Perhaps that is what was in the minds of the founders of Hong Kong-based Agamemnon Capital? But Agamemnon never enjoyed the riches he plundered from Troy, for no sooner did he return home than he was slain by his wife and the lover she’d acquired during his absence—the murder that occasions the revenge killings recounted in Aeschylus’ Oresteia trilogy.
Or how about Antaeus, the namesake of Antaeus Wealth Advisors, who was the giant-born son of Gaia? In a wrestling match, Antaeus could not be defeated because whenever he was thrown to the earth, his mother would restore his strength. But Antaeus eventually met his match when he wrestled Herakles, who held him high overhead until Antaeus’s strength ebbed away. He became the last thing that investors want a fund manager to be—a loser.
But not every mythological fund name is a misfire. Cerberus, the three-headed dog that guards the entrance to the underworld, is an apt eponym for Cerberus Capital, the well-known investor in distressed companies which are, figuratively speaking, at death’s door. Tiresias Capital bears the name of the sage who, though blind, was given the gift of prophecy. The ever-resourceful and wily Odysseus is the namesake of a number of funds under his Greek name or its Latin equivalent, Ulysses.
However, my personal favorite fund name has to be the now-defunct Eurycleia Partners, which recalls a minor character in the Odyssey. When Odysseus returned home after 20 years of war and wandering, he found his palace occupied by suitors striving to take possession of his lands by winning the hand of his faithful wife, Penelope. Knowing that the suitors would kill Odysseus on sight, the goddess Athena disguised him as a doddering tramp. At first, the ruse fooled everyone, even Penelope. Eurycleia, a longtime slave who had known Odysseus as a boy, was the first person to recognize him when she noticed a familiar scar on his thigh. Eurycleia—female, elderly, and a slave—had the lowest status of anyone in the household, yet she alone saw what nobody else observed.
In this way, perhaps gravitas is not what investors should look for in a fund manager, but rather the quality the Romans called vigilantia: the alertness that enables one to be the first to recognize an opportunity.
This piece originally appeared on Quartz.