While long-only macro funds were down 38 percent for 2009, hedge funds were down 18 percent, according to McClelland.

Mainstream’s clients are roughly split between individual and institutional investors. The number of individuals investing directly in hedge funds “is a pretty limited percentage” of the investing public, McClelland said.

McClelland also sees local foundations and institutions as an underexploited niche.

Unlike Sexton, he doesn’t see a reluctance for large foundations to consider local money managers, and Mainstream’s clients include local foundations he declined to identify.

“Wall Street does perhaps have better access to information. But Wall Street also suffers dramatically from group think,” McClelland said. “Being away from the herd can give you a perspective that’s sometimes better.

“Sometimes, you get a little extra look if you’re the home-team guy. That doesn’t mean they’ll pick you, but I think it can mean an easier time getting an audience.”

Questioning a Dotcom Rating

In 2000, while a Merrill Lynch financial consultant in Louisville, Jeffrey A. Sexton sent an email to Henry Blodget, then head of Merrill Lynch’s Internet-investment department, in which Sexton questioned the buy rating and $100 target price of a “new economy” company after the company’s annual report had been ridiculed in the business press for its amateurishness.

Blodget responded internally with emails suggesting an arbitrary price target of $30 “and rip this piece of junk off whatever list it’s on,” according to a New York Times article.

Ultimately, Blodget was charged with fraud for publicly touting stocks that he privately belittled, and in 2003 he was banned from the securities industry after a settlement.