Hedge Funds Might Be Under Scrutiny — But These Rising Stars Are Their Future

Al Kim spent 20 years in southern California after immigrating from South Korea with his parents when he was seven. He graduated from the University of Southern California with a BS in business administration, then worked for Santa Monica–based consulting giant Wilshire Associates in its investment consulting arm for six years. When it came time for business school, Kim opted to go far from home to attend the prestigious University of Chicago.

“I was intrigued with the prospect of moving away for my MBA in order to push me out of my comfort zone and experience a life change,” explains Kim, now with Helmsley Charitable Trust.

In 2008, following graduation, he joined BlackRock — where he had interned the previous summer — in the firm’s newly created multiasset group in New York. His primary job was to help build out the manager research business across asset classes.

Kim wound up returning to his LA roots when Roz Hewsenian, his boss at Wilshire, recruited him to join her at New York–based Helmsley Charitable Trust in 2015. Today Kim is one of two directors of investments responsible for implementation, which includes portfolio management, manager research — monitoring existing managers and looking for new ones — and managing the research and due diligence process. About 15 percent of the trust’s nearly $6 billion in assets is currently allocated to the broadly defined semiliquid segment, which is predominantly invested in hedge funds.

Over the past four years, the trust’s hedge fund portfolio, constructed by an outside adviser, has been restructured and in-sourced. Today Helmsley has investments with just five hedge funds and is a top-five investor with each of them. Of the five, four are long-short equity and one is long-short credit.

Brett Swenson likes to call herself a “geographic mutt.” The Chicago native graduated from Middlebury College in Vermont with a bachelor’s degree in economics and a minor in sociology, drawing on her love of math and interest in studying people. She interned one winter break for the Boston Federal Reserve, and after graduating joined Keefe, Bruyette & Woods in New York City. She worked there for about two years, then spent six months launching the firm’s office in Hong Kong, followed by a six-month stint at the San Francisco office.

Through friends and other connections, Swenson in 2010 joined Citadel, working in its then-nascent Surveyor Capital unit in the New York office as a business development analyst. She was promoted to director of business development in 2014. At one point she spent a year and a half in Dallas growing that office before moving back to New York.

“These are all opportunities you can’t say no to,” Swenson says of working in different cities at different jobs. “Saying yes to new challenges helped me a lot in many different ways. It provided me an openness, willingness, curiosity, and commitment to expand the scope of what I did and knew,” and showed she is a team player.

In late 2018, Swenson was promoted to chief operating officer for the Americas for Surveyor, one of three equities businesses that manage capital for Citadel’s multistrategy hedge funds. She essentially runs the U.S. business on a day-to-day basis, overseeing performance and process for about 30 investment teams across six offices and operational functions such as recruitment, talent development, corporate access, and counterparty relations. Surveyor employs more than 200 people.

Adam Parker has been interested in business and being an entrepreneur as long as he can remember. As a precocious ten-year-old growing up on New York City’s Upper East Side, the founder of Center Lake Capital remembers urging his older brother to apply to the Wharton School of Business.

“I was following business leaders, and the school’s name always came up,” he recalls. (His brother graduated from Stanford University instead.)

The careers of his parents no doubt also rubbed off on Parker. They had met at then–accounting giant Coopers & Lybrand, and his mother went on to run her own executive search firm while his father was a merchant banker at First Boston who then co-ran an advisory practice.

Parker attended — where else? — Wharton. As a freshman, he and some friends started a food delivery business for college students, a forerunner to GrubHub, selling it a year later. After graduating in 2008, Parker worked at long-short fund Force Capital Management, headed by former SAC Capital Advisors portfolio manager Bob Jaffe. Two years later he moved over to Stan Druckenmiller’s Duquesne Capital Management to focus on tech stocks. When the firm shut down shortly afterward, Parker joined PointState Capital, a Duquesne spinout. In 2014 he left to launch Center Lake.

“I always wanted to start my own firm,” Parker says. Today Center Lake manages more than $200 million, emphasizing disruptive themes in the technology sector, mostly midcaps. It eschews the so-called FAANG stocks and other megasize tech stocks.

“We are focusing on businesses mispriced over the long term,” Parker explains. Center Lake’s portfolio consists of eight to 15 long positions and zero to 50 short bets. The firm’s main fund had gained more than 30 percent this year through May after surging 76 percent last year. As a result, it has compounded at about 25 percent since its inception.

Philadelphia area native Logan Unland — who attended high school at St. George’s School, a boarding school in Newport, Rhode Island — always thought he wanted to go into business or finance. After his freshman year, he transferred from Denison University to the University of Colorado and embarked on that career path, enrolling in the business school and focusing on finance. “It triggered my interest in Wall Street,” he says.

A partner at recently launched Parkman Healthcare Partners, Unland parlayed an internship with a UBS brokerage firm in Boulder, Colorado, into a summer internship at UBS’s New York City office the summer before his senior year. He started his career in 2007 on the institutional sales and trading desk at Merrill Lynch.

“I saw the peak and trough,” he recalls, his tenure having spanned the time before and after the firm was acquired by Bank of America amid the financial crisis. “It was a wild time to be at Merrill Lynch.”

After stints on the financial services team at FrontPoint Partners and as an analyst and head trader on a TMT-focused fund at TCS Capital, Unland went to business school, earning his MBA from Columbia Business School in 2013.

He got his first exposure to health care stocks when he joined Millennium Management, focusing on health care services, medical technology, and diagnostics. The team Unland was on left Millennium together to join Schonfeld Strategic Advisors in the fall of 2016. Then on April 1 of this year, the team spun out of Schonfeld to launch Parkman Healthcare Partners, which focuses on the health care sector, especially less efficiently priced small- to midcap companies in medical technology, pharmaceuticals, biotechnology, health care services, and life science tools. At Parkman a team of six people, including four on the investment team, manages a little more than $250 million.

“Health care is a superdynamic industry,” Unland asserts. “If you look back five-plus years, it has had a better growth rate than any sector in the Russell 2000.”

Growing up in Pasadena, California, Tess Shih knew she had to get to the East Coast if she wanted to work on Wall Street. She attended the University of Southern California — 15 miles from her home — on a full scholarship, majoring in business and international relations. She interned in the asset management division at Merrill Lynch during sophomore year. At the end of her junior year, Shih was placed at JPMorgan Chase in New York, working on the foreign exchange sales and trading desk, through the Sponsors for Educational Opportunity professional development program.

“That’s when I discovered the world of New York,” says Shih, now with Capital Fund Management. “From financial modeling to the dos and don’ts of Wall Street, I learned to be faster and better, to be the first one in and last one out. It made quite an impression on this young girl from California.”

Shih spent nearly a decade at JPMorgan Chase in a variety of capacities, including working on the Troubled Asset Relief Program, a Bear Stearns spinout analysis, and a major cost-cutting initiative at Washington Mutual.

She got her first exposure to hedge funds while earning her MBA from Harvard, when she was selected to conduct a field study with the Harvard Endowment researching risk factors among alternative investments. On graduating, Shih joined quant shop Welton Investment Partners as the No. 2 in investor relations and business development. But when the $1 billion fund hit a rough patch after two years, she returned to JPMorgan Asset Management, working in its San Francisco office and then returning to New York, thinking she would be a JPMorgan lifer. But two years ago she was recruited by Paris-based quant Capital Fund Management to build its North America distribution.

Today Shih focuses on business development and investor relations and is responsible for clients in the Midwest and the South. “With big data and technology continuing to make a profound impact on the world, I believe that CFM is one of the firms at the vanguard of this evolution,” she says.

Seth Birnbaum always considered himself to be a highly curious person, interested in a wide range of subjects beyond what he learned in school. So when it was time for college, the northern New Jersey native — Bridgewater Associates’ youngest-ever portfolio strategist — headed off to Amherst College. He was drawn to the school because it does not have strict requirements and allows students to take classes that reflect their interests and even design classes with professors.

“I planned not to have a plan,” Birnbaum recalls. “My goal was to increase my perspective of things, think, and learn from people in other parts of the world.”

Gravitating toward economics, political science, and philosophy, Birnbaum graduated with a triple major in those subjects. “That was my lens on the world,” he says.

He joined Bridgewater right out of school, in August 2002, after answering an ad. In an engaging one-hour phone interview, Birnbaum discussed his areas of study, specifically international politics and probabilistic thinking. He learned that the job was really an internship, but when he later met with the firm’s three chief investment officers at the time — Ray Dalio, Greg Jensen, and Bob Prince — Jensen offered him a full-time job on the spot.

Birnbaum started off as an investment associate on the research team, spending his time, in part, trying to make sense of the economy and markets following the dotcom collapse and analyzing how analogous that event was to previous bubbles. Today he works closely with the three co-CIOs, along with co-CEOs David McCormick and Eileen Murray, on developing the next generation of investment capabilities and talent for the firm, as well as serving the firm’s global institutional clients.

His track accomplishments as a Wisconsin state running champion helped math maven William Heard attract athletic scholarship offers from as far away as California. But the Milwaukee native, who grew up in a rough inner-city neighborhood, chose to attend local Marquette University, graduating from its College of Business Administration with a BA in finance and real estate.

Along the way, the founder of Heard Capital replaced the athletic scholarship with academic scholarships so he could gain more finance and investing experience. Heard loaded up on classes two days a week and worked three. Frustrated by the theoretical nature of many of his finance courses, he worked hard to develop and eventually win support for a proposal for Marquette to establish the Applied Investment Management Program, the first undergraduate business program nationwide to be selected as a CFA Institute Program Partner. Students selected for the program get the opportunity to manage a slice of the university’s endowment.

After graduating, Heard spent four and a half years at local credit-oriented hedge fund giant Stark Investments as a special-situations analyst, focusing on telecom, media, tech, industrials, financials, and energy. “My years at Stark taught me how to think about equities from a creditor’s perspective, to understand first what can go wrong,” he says. “It formed the foundation of how I see the investment world.”

At 26 he started drawing up a business plan for his own hedge fund firm — and at the same time hedged by attending graduate school at the University of Chicago. When Madison Dearborn Partners co-founder John Canning Jr., whom Heard had met years earlier at an investment conference, agreed to be a day-one investor, Heard quit business school and launched his firm.

Today Heard Capital manages more than $100 million. It runs highly concentrated portfolios focusing on mid- and large-cap stocks in the six sectors Heard focused on at Stark. The firm’s long-short fund is up 7.5 percent this year through May, and the long-only strategy is up 19.4 percent. Heard, who recently partnered with Morgan Stanley’s prime brokerage group, thinks his firm has the capacity to manage as much as $5 billion in the two strategies combined.

Talk about an unconventional career path. Though Bank of America hedge fund specialist Ninon Marapachi is one of three rising stars born outside the U.S., she is the only one who for a period of time lived with her family in Tanzania in an unfinished house without running water, electricity, windows, or doors. Her fateful moment came when Marapachi — one of the top-ten students in her country in nationwide standardized test scores after her second year of high school — was selected to join an international program for the final two years of high school, all expenses paid, in Norway. There were 200 students from 100 countries, and the classes were taught by teachers from around the world in English, her second language after Swahili.

“Everyone was smart and trying to communicate in a single new language,” Marapachi recalls. “No one was supergreat at it, but everybody tried their best.”

Marapachi then ended up with a near-free ride at Mount Holyoke College in Massachusetts — one of many colleges that recruited from the international school — graduating in 2002 with a BS in economics and finance.

After a ten-week program interning in the wealth management group at Bank of America’s Merrill Lynch in her sophomore year — providing individual clients with hedging and liquidity solutions using derivatives — Marapachi was offered a full-time job if she finished her undergraduate degree in three years instead of four. She moved from structured products to product management and in late 2008 joined the asset management business. It was there that Marapachi started working with hedge funds in product management and then single-manager origination. She became origination and product manager for all hedge funds in 2013.

Today she is head of hedge fund origination, which is supported by a 50-person team within BofA Merrill Lynch’s alternative-investments group. The group, which serves wealthy individuals, has $12.5 billion in assets under management in 40 hedge funds available to clients across all strategies.

Dalton Investments’ Jennifer Lai has had the entrepreneurial bug since she was in kindergarten, when she sold cereal box toys so she could buy Tootsie Rolls. In high school she was an active trader of cosmetics on eBay — engaging in what she calls “arbitrage” — and while in college she bought and resold used textbooks.

“I was always fascinated by business,” says Lai, who along with her parents, both engineers, immigrated to the U.S. from China when she was four.

Not surprisingly, Lai focused on business in college, graduating from the Huntsman Joint Degree Program at the University of Pennsylvania with a degree in international studies and a business degree from the Wharton School. The program, which requires knowledge of a foreign language, also enabled her to explore her Chinese heritage by studying in Beijing for one semester. After stints at the Boston Consulting Group as a consultant and at Bain Capital working on a team that did leveraged buyouts, Lai joined Dalton Investments in 2014.

Today Lai is a co–portfolio manager for Dalton’s greater China strategy and emerging-markets strategy, specializing in undiscovered companies benefiting from China’s growth. She spends most of her time focusing on companies with market capitalizations of between $1 billion and $5 billion that are led by entrepreneurs rather than state-owned companies.

Lai says her knowledge of Mandarin is a benefit. It allows her to enjoy a closer relationship with management teams, which appreciate that they can communicate in the language, and she can ask more questions without a translator in the way. She can also understand cultural trends better.

“I am having the time of my life,” says Lai, who goes to China roughly every other month. “I travel and meet interesting people. I never met a boring entrepreneur, and I learn about many different types of businesses.”

Growing up just outside Boston, Jonathan Brudnick remembers his father starting his own small insurance brokerage. But it wasn’t until he was working for private equity firm Apax Partners and was involved in its investment in insurance brokerage HUB International that Brudnick fully appreciated what his father did every day.

“I talked to him about his business,” he says, noting that his brother also works in the industry as senior vice president and managing director of operations at insurance brokerage firm Risk Strategies. “It was great for my dad and brother to converse with me and talk about big industry trends.”

These days, Brudnick is an analyst at Sachem Head Capital Management, the activist firm founded by Scott Ferguson. “Scott has been an amazing mentor both on a professional and personal basis,” he says, adding that Ferguson taught him how to effect change at the firm’s portfolio companies, how to be a good leader and an effective activist, and how to interact with a management team and its board to get things done.

Brudnick also credits his mother with teaching him about empathy — “understanding how the other side is feeling,” he says. “This is important in activism.”

Brudnick graduated from Emory University in 2004 with a BBA in finance and in 2011 earned an MBA from the Wharton School of the University of Pennsylvania. He started his career at investment bank Houlihan Lokey before moving over to JPMorgan Chase, where he worked in the consumer, health care, and retail group for three years. He then spent two years at Apax, investing in growth companies in the technology-media-telecommunications (TMT) and business services industries.

After earning his MBA, Brudnick joined long-short equity hedge fund Carlson Capital and then moved on to Seneca Capital, where during his four-plus years he acquired the toolbox for identifying activist opportunities. He joined Sachem Head as an analyst in early 2017.