Orly Cooper

September 15, 2006

Orly Cooper is a 27 year-old who works for a investment advisory firm in London. The IM conversation took place on August 30, 2006 at 5:55pm.
IMInterview: hi orly
OC: hi michelle
IMInterview: investment advisory firms: good or evil?
OC: ha ha
OC: both
IMInterview: ha ha
OC: no seriously
OC: it’s an unregulated business
OC: which is good for the professionals
OC: but dangerous for the investors
IMInterview: why?
OC: there isn’t much public information out there for investors to make as educated a decision compared to public companies or regulated investment houses
IMInterview: do you think too much wealth is going to too few people?
OC:
can you clarify
IMInterview:
these “hedgefund” people make an obscene amount of $. it’s like professional athletes. do they deserve it?
OC: it depends…
IMInterview: the hedgefund people that is . . .
OC: there are multiple ways that the hedgefunds make money
IMInterview: also, why are they making this much money? and why isn’t everyone working for a hedgefund?
OC: many hedge funds have found specific strategies that outperform the market
OC: those hedgefunds are charging a premium to invest in their fund as opposed to investing in the market
IMInterview: are they ethical?
OC: that’s fair that they make more money
OC: what’s not ethical, or less ethical are the hedgefunds that are making money purely on management fees
OC: and are NOT providing returns > than the market
OC: because of the competition now, many new hedgefunds are differentiating themselves by not charging investors unless they do better then the market (only on the alpha)
OC: did that make sense?
IMInterview: not to me, but I’m not much of a finance person . . .
OC: comparing it to a non financial product…is it ethical that prada can charge exponentially more than gap?
OC: it’s a function of quality and demand
IMInterview: yes. prada is better.
OC: right
IMInterview: usually
OC: hedgefunds can provide you with higher returns
OC: BUT
OC: lots of hedgefunds make claims that they can’t follow through with and they are not regulated
OC: so investors have to be careful as to which ones they invest in
OC: i guess like knock-offs
IMInterview: haha okay
OC: anyone can say that they are a hedgefund
OC: well, that’s not exactly true…there are fairly new regulations that you need to register if you are going to claim to be a hedgefund, but…
IMInterview: what kind of people do you work with?
OC: the smartest
IMInterview: are they like the guys from Boiler Room?
OC: NO
OC: not at all
OC: they are a bunch of super smart guys…much more quant and much less suave
IMInterview: what would they be doing if they weren’t working at an investment firm?
OC: something mathmatical…maybe nuclear physics
OC: 😉
IMInterview: what would you be doing?
OC: probably trading for a prop desk in a bank
IMInterview: that’s what you would do if you weren’t working for an investment firm?
OC: for now
OC: maybe i’ll change paths in the future, but not in the near future
IMInterview: is there any way to use hedge funds for the good of humanity?
OC: sure
IMInterview: discuss
OC: some hedgefunds invest in CSR companies only
IMInterview: (corporate social responsibility)
OC: additionally, the companies themselves do not necessarily have to be involved in CSR or CSR investing, but the amount of wealth that is being generated is just more money to be allocated to the person’s charitable source of choice
OC: like soros
IMInterview: what’s your favorite thing about your job?
OC: the creativity and innovation
OC: i know you’re laughing
IMInterview: scratching my head with a confused look on my face . . .
OC: but the markets are fairly efficient, and some would argue perfectly efficient. so, finding ways to make money, takes a lot of creativity
IMInterview: i see
IMInterview: I thought you were gonna say the money
OC: most hedgefund traders would probably say that
IMInterview: ha ha
OC: which is fair…especially the ones making the enormous year end bonuses, but that’s not the majority
IMInterview: ok, thanks for the interview!
OC: sure
OC: hope it was helpful
IMInterview: definitely.