A success story behind Hedge Funds
Copal Partners, the success story behind Hedge Funds.india Updated: Feb 16, 2006 18:19 IST
The term "hedge fund" dates back to the first such fund founded by Alfred Winslow Jones in 1949. Jones' innovation was to sell short some stocks while buying others, thus some of the market risk was hedged. While most of today's hedge funds still trade stocks both long and short, many do not trade stocks at all and the term hedge fund has come to mean a relatively unregulated investment fund, often a partnership rather than a corporation in form, and characterized by unconventional strategies (ie, strategies other than investing long only in bonds, equities or money markets).
Today there are approximately 7,000 hedge funds in the United States that command an estimated $750 billion in assets and leave a wide footprint in the financial market. They are believed to account for as much as 20% of all US stock trading. With such huge amount of money involved it is evident that the government would try and regulate them as well. With such high returns they become more and more attractive to an average investor with money. Further more, rock solid background work and research work becomes imperative as the risk factor is simply too high. This is where India comes in, literally. Such research was previously carried out generally by a Harvard trained analyst at a major investment bank in New York. It is now being carried out by an analyst in India.
Copal Partners, the leading equity research and investment banking focused KPO, is changing the way Wall Street operates. They provide research and analytical services to large investment banks, hedge funds, and private equity funds. Within investment banks the company works with their M&A, Equity Research and Credit Research departments. Copal Partners provides its clients with research and analytics services through a broad array of client-specific proprietary products.
A single focus on providing research for the financial services industry sets Copal apart. Most of the output generated is for investment bankers and hedge fund managers who use it to make key business decisions. Copal generates 60% of its business from US clients and 40% from European clients. Copal Partners is 4 years old with a gross turnover of 7 million USD or 31 crores.
Copal Partners has offices in New York, London and Gurgaon suburb of New Delhi, India. The company at present has 250 analysts working for them.
Copal was founded by professionals with executive experience at McKinsey & Co, GE Capital, Goldman Sachs, and JP Morgan. The master minds behind Copal Partners are Rishi Khosla and Joel Perlman. Rishi Khosla who manages the private equity and venture capital activities of Lakshmi N Mittal, the global steel magnate who was ranked the 3rd richest individual globally behind Bill Gates and Warren Buffet. Rishi started his career in banking where he wrote one of the first equity research notes on the third generation of mobile telephony, and participated in a number of advisory transactions, including an asset swap between GRE and ING and a divestment programme for the Polish government.
Joel Perlman founded and managed Latin Venture, a marketing firm with operations in the US and major Latin American markets. Latin Venture was sold to a WPP sponsored venture capital fund, where Joel joined as Managing Partner. Previously, Joel was a consultant at McKinsey & Company, where he participated in several engagements with Fortune 100 companies, with emphasis on business strategy, growth and process reengineering in the banking industry.
First Published: Feb 16, 2006 17:55 IST