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May 31, 2001

A Son Also Hedges

By Kathryn M. Welling

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Wayne Cooperman runs a Manhattan-based hedge fund, which - as fate would have it - is also what his father does. That's right, Wayne's father is Lee Cooperman, the erstwhile czar of sellside research and proprietor of the mega hedge fund, Omega Advisors. But Wayne hasn't exactly followed slavishly in his paterfamilias's footsteps. Not only does Wayne profess absolutely no desire to rake in the largest pile of assets on the Street, it was Wayne who first went to work on the buyside.

His father still toiled at Goldman back in 1989, when Wayne joined Mark Asset Management as an MBA fresh out of the Wharton School via Stanford. Wayne struck out on his own in 1994, forming Fusion Partners (with Ricky Sandler, yes, Harvey's son). That pairing lasted only four years and Wayne has been the sole manager of the hedge fund (renamed Cobalt Capital Management) since January 1999.

In that span, he has presided over net annual returns to investors of 29.9 percent and 41.6 percent, not to mention an 8.96 percent net gain so far this year, through April. (On a cumulative basis, the fund produced a fat 384.1 percent net return to investors in its first 25 quarters in existence.) Still, as we sat down to talk recently, Wayne was in the mood to complain: "This market is just brutal."

How many millions do you have under management now?

We're managing about $450 million in our domestic and offshore funds. We've sort of had a long-standing goal of getting to $500 million. I don't want to say that we're going to stop when we get there, but we'll at least take a healthy pause to assess our ability and desire to manage more. I'm one of the largest investors in our fund. So I'm much more concerned about good, steady, solid performance than building a behemoth. And I like to be hands-on. I want a small, high-quality organization - and we don't want to price ourselves out of good ideas, either. What we like are good stories with cheap stock prices.

Does that make you a "growth at a reasonable price" investor, to sink into consultant-speak?