Firm Puts Hedge Fund Plans On Ice, Sells Research

Jan 19 2006 | 7:41pm ET

Twelve years ago, then 34-year-old Boston native Jim Copell never dreamed of working in finance, much less owning his own asset management and research firm on Wall Street. He didn’t attend college; he never even finished high school. Next week, Copell, who spent four years with Bear Sterns as a floor trader on the New York Stock Exchange, is publishing his company’s first research reports. The reports will focus on individual industries, utilizing proprietary research based on a customized data mining system created by a team from Massachusetts Institute of Technology.

“Every report must contain something that no one else knows,” said Copell, who now runs seven separate research teams at Copell Financial, but originally had no intention of selling his reports.

In March of 2004, the self-educated, former high school hockey coach left Bear Sterns to strike out on his own. His aim was to “build a company based on honesty and integrity,” drawing on his experience in both the fundamental and the technical sides of investing. There was one problem: despite having spent seven years on the floor of the NYSE, and two years with investment firm Wheat, First, Butcher & Singer, he had no experience as a portfolio manager.

“The biggest obstacle is that I don’t have a track record,” said Copell in a jovial, Beantown accent. Originally, Copell had planned to launch a hedge fund in January of this year, keeping his proprietary research for his own use. But, without a track record, Copell and his team were unable to raise enough capital for the fund, so he put that plan on ice until 2007.

Over the course of last year, however, Copell found that there was a demand for the type of research his firm was producing. In September 2005, Copell sent out a report predicting that Ben Bernake would be the next chairman of the Federal Reserve to around 200 funds and family offices.

“We got calls asking us to sell our research,” he said, “but we said ‘no’ because we wanted to put up a Chinese Wall.” However, after postponing the launch date of his fund, Copell, who continued to receive requests for his report, no longer felt there would be a conflict of interest by selling his research.

On Jan. 23, Copell will release the first of his industry reports, which cost $10,000 per month and are sold on an annual subscription basis.

Copell, who believes that one of the most valuable things he learned as a hockey coach was to build organizations and teams, is now focusing his energies on staffing up his own squad.

“I’m looking to hire 30 more people in the next 12 months,” he said. Next year, when Copell plans to launch a hedge fund, he will split his firm into two parts—research and money management— in order to quell any perceived conflicts of interest. 


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