Rob Davis, a prime broker to hedge funds, began worrying about his industry’s image on September 29, 1998, not long after the collapse of the hedge fund Long Term Capital. That evening, as he sat reading the Wall Street Journal, he came upon the headline “hedge funds: the new barbarians at the gate.” “It was a terrible article—it was vilifying the whole industry!” he said the other night, his voice rising. “I decided I would call all the people in my Rolodex. I would say, ‘Hey, we gotta get together and get better publicity.’ ” Davis’s plan was to hold a charity dinner, one that would benefit two very different causes: it would raise money for child-abuse prevention (an issue he has been concerned about since his days as a public-school teacher), and it would provide image rehab for his beleaguered colleagues. The dinner spawned a year-round non-profit, which Davis named Hedge Funds Care.

Davis was at Cipriani 42nd Street, greeting hedge-fund managers, lawyers, accountants, back-office managers, and headhunters, who had turned out for the eleventh annual Hedge Funds Care benefit. This having been almost as bad a year for hedge funds as for charity galas, things had been scaled back a bit. 2008: black tie optional, filet-mignon sit-down dinner. 2009: business attire, mini-hot dogs on trays, hot buffet, free-for-all seating. The venue—a grand space with marble pillars and soaring ceilings, built in 1921 to house the now defunct Bowery Savings Bank—gave the evening a valedictory feel. “I see a lot more sober people than in years past,” one guest said, scanning the room.

Davis felt that his volunteer P. R. effort was more urgent than ever. “This,” he said, referring to the current financial crisis, “is like multiples of that”—the collapse of Long Term Capital—“in terms of the damage it’s done to the businesses, to the perception of them.” Having ignored the new dress code, he wore a tux, and was strolling around with a visible sense of purpose, shaking hands. “Hedge funders are really the most philanthropic guys in the world,” he kept saying.

“They are,” his friend Mike Vranos, the recipient of the 2007 Hedge Funds Care Award for Caring, agreed. Vranos had just presented this year’s Award for Caring to Kenneth G. Tropin, of Graham Capital. (From Tropin’s remarks: “I have great confidence that over time not only will our industry prevail but it will be stronger than ever, and that our collective talent is too great to be denied.”)

“Mike’s wonderful—he manages a very substantial hedge fund,” Davis said. Vranos is presumably the sort of hedge-fund guy whose image Davis is trying to redeem. His fund, Ellington Management Group, has, since its inception, in 1994, been a major investor in mortgage-backed securities. (Earlier in his career, he developed an intimidating reputation. As a young bodybuilder, he was crowned Mr. Teen Connecticut and worked as a bouncer; his nickname at Harvard was Captain Iron; and in the early nineties Kidder Peabody lore had him turning meetings into arm-wrestling matches.)

With the evening’s proceeds topping out at $1.3 million, down from $2.2 million last year, the two men compared notes on fund-raising tactics. “I have a shakedown list,” Vranos explained. “You say, ‘Give money or else.’ ” Even so, he said, selling tickets was much tougher this year. “I believe in karma. Now’s the time.” He went on, “That’s how the Greeks do it. If you’ve got a new house or something you’re starting anew, that’s when you go. You give the money, you bless them. It’s a rebirth, that’s what this is.” He added, “The jaded reporter’s way of looking at it would be that a snake has to shed its skin.”

Davis jumped in. “I don’t want you to use the snake analogy,” he said. “There’s too much of that.” ♦