With web-based apps like ride service Uber reaching stratospheric valuations, venture capital firm founders becoming household names on Twitter and technology incubators popping up like greenhouses, the U.S. economy has entered a tech frenzy. Where it will end remains a subject of much anxiety and speculation. But one thing is clear: Few investors benefited more from the bursting of the previous dot-com bubble than hedge fund managers.
During the early 2000s assets poured into the hedge fund industry as pension funds and other institutions sought protection from another big drop in equity prices. More than 1,000 new hedge funds launched annually from 2002 through 2007, reflecting top traders’ and managers’ eagerness to get into the business.
Since the market meltdown of 2008, it has been a different story. Although hedge funds are still a draw for leading talent — and continue to appeal to institutional investors — newer firms are struggling as large allocators favor well-known funds. With banks no longer engaging in proprietary trading, hedge fund firms have become not only market makers themselves but also the training ground for the next generation. At the same time, more young hopefuls are flocking to tech with dreams of inventing the next billion-dollar app.
Institutional Investor’s annual Hedge Fund Rising Stars list, compiled through feedback from the hedge fund industry and input from our editorial staff, shows that in tough times the best really do rise to the top. These 30 professionals are committed, hard-working and well respected by friends and peers. They’re also altruistic, giving money and time to many worthwhile causes.
Robert Campion, senior vice president of business development at Los Angeles–based Canyon Capital Advisors, works with at-risk youth. At New York–based Hollis Park Partners, founder T. Troy Dixon sits on the board of a nonprofit that provides children with scholarships and has given generously to the college he attended. Laura Roche, COO and CFO of Roystone Capital Management in New York, teaches at Fordham University and also helps young people at risk. By creating a conference for 100 Women in Hedge Funds, Nadine Terman, co-founder and CEO of Bay Area–based Solstein Capital, has given female hedge fund managers access to asset allocators. Katherine Chan, a partner and senior analyst with New York–based Anandar Capital Management, co-chairs a 100 Women in Hedge Funds committee that helps young women thrive in the alternative-investment industry.
As markets and investors brace for a downturn in the not-so-distant future, hedge funds will be well positioned to take advantage, given their flexibility and insatiable appetite for new opportunities. Look for this newest generation of talent to lead the charge.