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What could save hedge funds? Marketing! (Maybe)

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Hedge funds are going to be able to start advertising next week.

Good for them. They could use the help.

They are not the hot thing anymore. Just look at the chart from Google Trends below. You can see that interest in them, assuming Internet searches on the Web giant can be taken as an indicator, has declined.

Their returns have been mediocre of late, which obviously hurts their appeal. OK, some of the bigger hedge funds are doing pretty well and even garnering a little more business (see video below). But on the whole, not so good.

It's showing up in their pricing, too. Like any beleaguered business, hedge funds are reportedly cutting prices to maintain business. The "2 and 20" standard fee system—2 percent of the funds under management and 20 percent of the profits—is getting to be more like "1.6 and 18," according to The Wall Street Journal.

Waning interest, price-cutting ... sounds like a business that needs to advertise!

And come Monday, they can! The SEC rules allowing various outfits to solicit investors through advertising and other channels will finally go into effect.

So expect a wave of ads? (Related: Hedge fund slogans)

"I do think, at least initially, that some funds may start dipping their toes into the general solicitation waters primarily to raise their brand profile, but they will stay pretty conservative in their approach," emailed Steven Nadel, a partner with Seward & Kissel, a law firm doing work in the private equity sector. "Over time, depending on consumer and regulatory reactions, the needle may slowly move towards more aggressive actions."

Indeed, regulators will be watching carefully. They will be watching for shady operators who might creep in and, well, lie to investors about investments. Regulators always look for that.

But in this case they'll be watching the advertisers, legitimate and otherwise, to make sure they are doing business only with investors with the wherewithal to make intelligent (in theory) judgments.

Some think that will cut down on the pool of eligible investors and therefore the need for widespread advertising. Others aren't so sure and note there may be lots of untapped money ready on the sidelines.

"I think that there is a certain amount of 'unconnected' money that will be moved by the hedge fund ads," said Michael Farr of the investment management firm Farr Miller & Washington. "I think it will result in a short spurt of new funds. Then, I think that additional ads will compete for 'alternative' money in motion."

By "unconnected" money, Farr said he means well-off individuals without a regular broker.

"These folks are often small business owners who keep their heads down and squirrel money into huge Fidelity and Schwab accounts," he said in an email. "You would be amazed at the multimillion-dollar accounts that walk through the front door of the Fidelity office and open accounts at the counter. These ads may be their first opportunity to access the rarefied hedge fund air."

Of course hedge funds may face the same general headwinds with these investors as the general equity market has with retail investors in general. That is, a lack of interest.

The Financial Crisis of 2008, the Flash Crash, Knight Trading, the Flash Freeze ... all these events plus generally down markets over the last decade have driven investors to the sidelines and market volumes down.

There just isn't much interest. Use Google Trends on stocks and investing and you get graphs that pretty much look like the one here.

And so business and government alike have been looking for ways to draw capital to markets. Hence the law allowing hedge funds to advertise.

Will it work? Well, marketing has been known to succeed. Of course, it helps to have a product that works, too.

Allen Wastler is managing editor of CNBC.com. Follow him on Twitter @AWastler. You can catch his commentary here and on CNBC Radio. And check out his fiction.

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